An Empirical Study Of Asset Impairment Impact On Earnings Management

With the rapid development of economy, the phenomenon of earnings management oflisted companies becomes a focus of attention from all walks of life.Using assetimpairment provision and return profit manipulation is an effective and important means ofearnings management of listed companies in our country, affecting the accountinginformation authenticity, reliability, harm the interests of the broad masses of theaccounting information users, the development of market economy in China has a badinfluence.On February15,2006, the Ministry of Finance issued "Accounting Standards forEnterprises No.8-Impairment of Assets, in2007the full application of the new standardsin listed companies. The new standard requires asset impairment loss is recognized, it cannot be reversed in subsequent accounting periods, to some extent, curb the use of long-termimpairment of assets of listed companies prepared for earnings management behavior.However, due to the complex situation faced by listed companies, listed companies fordifferent impairment criteria for asset management tool in curbing a surplus, whileinevitably lead to the emergence of new means of earnings management, earningsmanagement of listed companies to behavior to leave space. In this paper, theimplementation of new accounting standards as an opportunity to explore the impact of thenew standards after the implementation of the earnings management, status and solutions.This paper uses the method of combining normative research and empirical research,based on the basic theory of the impairment of assets and earnings management, analyzesthe relationship between the two. The listing Corporation in China using assets impairmentto earnings management to do the descriptive statistics and correlation coefficient analysis,to distinguish between short-term and long-term assets impairment, using specific accruedmodel for empirical research, draw the following conclusion:Before the implementation of new accounting standards, the enterprise use illiquidasset impairment provision for the possibility of earnings management is bigger, thepossibility of using liquid assets smaller; Since the implementation of new accounting standards for listed companies through the provision for current assets and non-currentassets impairment provision for the possibility of earnings management are very small.