The Accounting Standards On The Impairment Of Assets And Earnings Management Of The Listed Companies

With the development of the economy, China has taken a succession of reforms with regard to accounting for impairment of assets. The Accounting Standards for Business Enterprises, issued by the Financial Department, mark a significant milestone in the history of accounting in China. The Standards, as a whole, seemingly tries to identify with the international accounting standards, however, the Accounting Standard for Business Enterprises No.8-Impairment of Assets, hereafter simplified as Standards on the Impairment of Assets embodies obviously the style characteristic of China.-The Standards on the Impairment of Assets explicitly specifies that, "Once the impairment of assets is confirmed, it cannot switch back during the subsequent accounting", which is different from that of the international accounting standards, stating that, "if there is indication that the impairment of assets confirmed in the previous years no longer exists or has been reduced, the impairment of assets can be reversed." This substantial difference has aroused great concern among the domestic scholars.Many scholars hold that in the present situation of China where emphasizes the reliability of accounting information, it is a realistic choice not to allow the reverse of the long-term assets impairment, which is beneficial to prevent the enterprises from misusing the system for their profit reconciliation. The new accounting standards have been executed for over three years, how does it work factually? Thus, named as The Accounting Standards on the Impairment of Assets and Earnings Management of the Listed Companies, this paper altogether includes six chapters.The first chapter introduces the research background, research targets, research significance, research objectives and research methods; The second chapter puts forward the research issues based on the analysis and illustration of the relevant theories; Chapter three analyzes how to exploit the assets impairment to mange the earnings in detail and the theories of accounting assets impairment from the aspects of accounting objectives, capital nature, accounting measurement and physical capital maintenance. This chapter also analyzes earning management theory in respect of contract perspective, information perspective and opportunism behavioral perspective. Chapter four ties to point out that the current accounting standards of asset impairment have a strong pushing effect on the earning management by analyzing their mutual influences. On a basis of chapter four, the fifth chapter analyzes in detail how to exploit the assets impairment to mange the earnings in the way of case studies. The sixth chapter puts forward suggestions to perfect the standard of assets impairment from the aspects of accounting criteria, internal environment and external environment.This present paper contributes a lot to the study of assets impairment and earning management, and analyzes the relationship between the two important factors as well. Based on the analysis of those theories, in the way of cases this paper points out some problems and puts forwards three suggestions for the aspects of the new standards which need to be improvedTaking all these factors into account, this paper still has lots of insufficiency due to the difficulty in colleting information. Besides, the writer doesn’t engage in the study by way of samples on account of the absence of empirical study experience, however, the writer has determined to develop a further study in the future.