The Research On Factors Concerning Investment Real Estate Accounting Policy Choice Of Listed Company

Although historical cost accounting is still the major accounting policy, with the economic improving, it can not accurately reflect some significant influence and situations of enterprise value. And as a information system, accounting provides not only focus on reliable, but also emphasize on relevant and useful. Based on this, the Western countries take a lead in using the fair value measurement attribute for financial reporting, and gradually expand its use. In the context of international convergence of accounting standards, according to actual situation, our country introduce the fair value measurement attributes widely but cautiously, including the measurement of investment real estate.In the past, investment real estate is treated as tangible assets or intangible assets when measured by historical cost. But because of rapidly rising in housing price, the traditional measure model clearly not truly reflect the market value of assets and the risk. Qualified enterprises under the new standards can be measured at the fair value model of investment real estate, to make up for the shortcomings, and reflect the appreciation in assets value as profit, in order to bring a sharp rise in corporate performance. Therefore, people expect that listed companies will take a widely use of fair value model. However, since2007, the number of using fair value measurement of investment real estate listed companies is only about3%, many of companies which meet the conditions of fair value model still maintain the historic cost model. What influence the choice of the listed companies on investment real estate accounting policies? In this paper, the study conclusion will provide the evidence of choosing accounting policies, in order to help decision maker with rational thinking.This paper is divided into six chapters:Chapter One, Introduction. At the beginning, this part introduces the background and significance of selection factors for investment property accounting policies of listed companies. Then, organize the current research situation in two views, historic cost model and fair value measure attributes. Finally, it shows the framework of this paper and the approaches to study the discussions. This chapter is the starting of the full textChapter Two, the Theoretical Analysis and Comparison of the Measurement Model of Investment Real Estate. This chapter first defines the concept of Chinese investment real estate, the application area and the accounting measurement methods. Then followed by theoretically analyzing the cost model and fair value model, the former one is based on the concept of responsibility and reliability, the latter one is based on usefulness and correlation. Finally, compare these two models, and analyze their strengths and weaknesses, to lead the following part of selecting from two measurement attributes.Chapter Three, Current Usage of Investment Real Estate Accounting Policies in Listed Companies. First section presents the use of fair value model in three aspects, and find that only a few of companies started using fair value model. And the companies which achieve a higher portion of investment real estate prefer using fair value model, but the industry is not the impact of choosing accounting policy. Second section presents several fair value methods and statistics of companies which using the fair value model in2011. Last section, deeply analyze the impact of transferring historic cost model to fair value model in three aspects, there are financial situation, corporate business performance and tax. This section preliminary discuss the factors which influence choosing the accounting measurement model.Chapter Four, Factors Analysis of Investment Real Estate Accounting Policy of Listed Companies. Specify what affect the choice of measurement model from external and internal as well as various factors. External factors include market trends, policy bias, way to achieve fair value and assessment level of assets. Internal factors include ownership structure, management bias, impact of earnings management, tax, cost of measurement, ratio of investment real estate and professionalism of accounting staff.Chapter Five, Statistical Analysis of the Factors of Investment concerning Real Estate Accounting Policy Choice of Listed Companies. This chapter is the main part of this article, according to CSMAR research database and annual reports of listed companies which ending balance of investment real estate is not zero, author analyze the current situation of selecting accounting policy among different enterprise and achieve the statistical regularities of using these two modes. Chapter Six, Conclusions and Suggestions. Author propose the following conclusions:firstly, the more popular of real estate market, more enterprise will use fair value model; secondly, current accounting policy tend to cost model, and the lack of standards in asset evaluation system is the main reason which restrict the improvement of fair value model; thirdly, compare to non-state-owned enterprise, state-owned enterprise prefer to use historic cost model, and the enterprise which has higher degree of equity checks and balances, it will be more reluctant to adopt the fair value model; fourthly, cost model brings more advantages in earning management, enterprises which want to retain more earnings management space prefer to cost model; what’s more mature enterprises which financing ability is excellent tend to using cost model because of stabilize, otherwise, they will choose fair value model to enhance the influence of enterprise; finally, younger managers and managers who are not in long term are willing to take the risks of fair value model.The main contribution of this paper is the novel research methods, and in order to distinguish external influence from internal influence, author gathered amount of statistical materials, analyze the accounting policy situation in2011from multiple angles, achieve some characteristics of choosing accounting policy, provide a reference for future studies.Deficiencies in this paper:Due to the author’s capability, the samples used in this paper focus on the enterprises which the portion of investment real estate is higher the6%, discard the remaining700companies.This article is not completely discuss the factors of choosing accounting policy, it just study some major issues of current research. Partly analyze the single influencing factor of obtaining information.Failed to analyze the influencing factors more comprehensive, and failed to point their internal connection and synergistic effect. But in real life, the managers who determine the choice of accounting policies usually consider variety of factors in order to achieve their purpose.