The Financial Effects Of The Changes Of Long-term Equity Investment Accounting To The Enterprises In China

In recent years. Ministry of Finance has promulgated <Explanation No.l-5>. which makes further revision and perfection of enterprise merger, long-term equity investment, goodwill confirm in2006version <Accounting Standards for Business Enterprises>. The promulgating of <Explanation No. l-5>, is a improvement of standards advancing with the times, and of great importance to establish and perfect our socialist market economy system. It shows convergence of China’s and international accounting standards, and also plays a good role of restrictions on whitewashing financial statements.This thesis topic is determined in this context, combining with the characteristics of listed companies’ environment, according to the theoretical analysis of the changes of long equity investment accounting and the case analysis of Baosteel Group in China, discussing the financial effects of the changes of long equity investment accounting in <Explanation No.l-5> to listed companies. This thesis is based on financial accounting theory, collecting and collating Baosteel Group’s financial data from2007to2011in CSMAR series research database, studying the financial effects of classification of equity investment, change of merger range, change of investment income accounting under cost method, change of merger goodwill accounting to Baosteel Group. It provides some basis of choosing long-term equity investment accounting for listed companies in China, and relevant suggestions on how enterprise managers manage long-term equity investment effectively and how government set appropriate policies and measures, which makes a progressive significance of improvement and international convergence of long-term equity investment theoretical system in China.