The Influence Of The Reform Loss Model And The Suggestion

After the revising of International Financial Instruments, China has been activelyinvolved and domestic experts engaged in extensive discussion. They thought thataccounting should reflect the objective substance and provide useful information for usersof financial statements as a information system, and treat it as the goal and basic functions.The Expected Loss Model aimed to smooth all of the profit and loss, in order to ensure thestable operation of the business, which largely damaged the independence of theaccounting. So, we should take full cautious in this stage.This thesis introduces the advantage and disadvantage of the main impairmentsmodels in details; introduced the impact of Excepted Loss Model on the financial companyand accounting impairment criteria, then suggest that: the Excepted Loss Model is notsuitable for this stage. But Incurred Loss model can’t effectively deal with the economicenvironment changes. Therefore, we should do some improvement to it. I propose theImproved Loss Model based on the previous research, and suggest it should be used inlisted companies. For small and medium-sized enterprises, they should continue to use theIncurred Loss Model.Financial instruments accounting standards is an international problem, so the effectsof this thesis just help readers to deepen the impairment models for financial instruments,especially for the Excepted Loss Model. I hope I can start the discussion, and also hopethis thesis can provide a reference for the formulation of guidelines on the impairment offinancial instruments.