The Research On The Transferring Of Long-term Assets Impairment From The Perspective Of Earnings Management

In recent years, with the rapid development of economy, the companies are facing increasing uncertainty and risk, so the quality of assets have been questioned, impaired assets have been concerned commonly for the national accounting profession, at the same time, the understanding and research for impairment of assets are in depth gradually in China. Our policy of asset impairment was introduced in1992, the Ministry of Finance repeatedly revised it following the first attempt to the impairment of inventory and accounts receivable. As the accounting about asset impairment in China started latterly, there are still some problems either in theory or practice, the policy of asset impairment become the tools for earnings management of listed companies. Based on the situation, the "Accounting Standards for Enterprises No.8-Impairment of Assets" formulated by Ministry of Finance in2006, clearly stated "the loss of the long-term asset impairment recognized can not be reversed in subsequent periods", trying to curb the behavior of earnings management. The new guidelines, however, only reduced a means of earnings management, but still leaves using transferring impairment, which is a means too. Under the new policy, whether the listed companies have used transferring the long-term assets impairment to manipulate the earnings? How the utilization of transferring the impairment is for different earnings management motivation of listed companies? This paper discusses the relationship between transferring the long-term assets impairment and earnings management, aiming at putting forward some advice of accounting standards and regulatory.This paper selects A-share listed companies from2007to2011as the research object, and gets2772companies as samples. By using the method of empirical study and two models, the following conclusions are formed:transferring the impairment of long-term assets have positive correlation with earnings management; Small profit, highly profitable, loss and turnaround company have used transferring the long-term assets impairment to adjust profit; the company that management changed didn’t use transferring the long-term assets impairment to manipulate the earnings. The paper concludes some suggestions for disclosure and regulation of asset impairment at last.