The Case Study Of Earnings Management Of The Yunnan Luoping Zinc&Electricity Co.Ltd.by Assets Impairment

With the rapid development of society and economy, China’s listed companies are facing a rapidly changing market environment, the operational risks and financial risks of listed companies have increased too. Therefore, Earnings management of listed companies gradually exposed, the problems have attracted the attention of the community, And it has become an important field of economics and finance research. Excessive Earnings management is not only misleading stakeholder investment decisions, but also affect the allocation efficiency of social resources, endangering social security funds.Since1998, listed companies must provision for impairment, because of the impairment of assets’ Judgment is more complex and need professional judgment, it makes for impairment of assets subjective judgment. So, the provision and reversal of impairment of assets of listed companies has become one of the most commonly used accounting policies earnings management. In2006, Ministry of Finance reforms the accounting standards. To some extent, The new accounting standards closer to international accounting standards, but it has a characteristic. Ministry of Finance has draw up an independent asset impairment accounting standards, and enacted the "Enterprise Accounting Standards No.8-Impairment of Assets". The changes in the new accounting standard for impairment of assets is that most long-term assets are not reversed the provision for asset impairment provisions, it is largely curbed the earnings management behavior of enterprises. But the accounting standard can not be unavoidably, it is to some extent a listed company earnings management space left.Under implementing the great background of new asset impairment, this paper uses the research technique which the theory analysis and case study unifies, based on the actual asset impairment situation of Luoping Zinc&Electricity Co.,ltd.. using the two basic earnings management metrological model, combining with the financial condition financial data between2006and2012of the company, and analysis the earnings management means and motivation. Studies have shown that Luoping Zinc&Electricity Co.,ltd. exists earnings management behavior. Its’ motivation is to avoid delisting to exaggerate losses and profitability in the next year. Due to the implementation of new accounting standards listed companies more inclined to take advantage of short-term asset impairment provision and turn back earnings management. At last, this article analysis of the causes of the behavior from the company’s own, asset impairment accounting standards and asset impairment accounting standards to try to offer a few proposals.