The Disclosure Of The Listed Companies In China Non-recurring Profit And Loss

Effective stock and bond markets are very important to the modern economic, particularly as China is developing rapidly and requires large amounts of capital for investment. Effective market will put money to its most efficient use. Companies obtain funds from investors, and publish financial statements to help investors make investment decisions. As owners of the funds need the companies’basic information by financial statements to ensure that their investment doesn’t impair. Since stock price and accounting information have a natural relationship, investors generally use accounting information in decision-making. Thus, the accounting information announcement will lead to a significant reflection in stock price. Based on this, earnings in financial statements of listed companies attaches great importance, which also leads to a number of listed companies take bath for earnings management. However, this kind of manipulation of the surplus is impossible to sustain high growth. Once a fall in earnings, stock price begins to fall, resulting in loss of investors. To what extent the adjusted earnings management affects the value of listed companies as well as how to improve the quality of disclosure for nonrecurring items, has been accounting academics’long-term research problem.This issue combined normative and empirical analysis on the study of the value-relevance of listed companies’nonrecurring items in China. In terms of normative analysis, beginning with discussion of the China Securities Regulatory Commission’s five provisions on nonrecurring items, compare differences between home and abroad. Then, based on the incomplete contracting theory and efficient market theory, analyze the motivations of earnings management by nonrecurring items as the main means and the cause and nature of surpluses after non-recurring adjustment having an impact on shares of listed companies. Empirical analysis area includes general disclosure status analysis nonrecurring items of listed companies in2010and establishing price model to analysis correlation between listed company nonrecurring items and shares from2006to2010.Research found nonrecurring items has value information content, and surplus management degree and shares have positive correlation. In conclusion, give some recommendations on both micro level and macro level.