Research On The Accounting Confirmation And Information Disclosure For BOT Based On Property Rights Perspective

BOT has become an important way of investing and financing in China recentlyand it is widely applied in public infrastructure construction projects such as sewagedisposal, construction of roads, bridges, tunnels and so on, which has effectivelypushed forward the development of China’s public infrastructure construction. Withthe further promotion of BOT in China, it becomes increasingly important formaintaining the economic order of infrastructure construction to standardize theaccounting treatment of BOT to reflect the operation performance of the projectcompany correctly. Optional processing phenomenon exists in some aspects of recentBOT business accounting practice such as asset recognition and informationdisclosure. One major reason of the reasons accounting for the phenomenon is thevague definition of property rights in BOT business, which ignores the impact ofproperty subject on accounting treatment.This article argues that, the core of the accounting treatment of BOT business isdefinition of property rights. Since the main contract content of the BOT is franchise,the special nature of the business led to the special nature of the content associatedwith recognition, revenue recognition, asset management, accounting informationdisclosure and other accounting treatments. Defining the ownership, usufruct, userights associated with this business correctly is the key to accounting treatment ofBOT business. Based on property rights theory, stakeholder theory and propertyaccounting theory, this article analysis various stages of the subject property relationsabout the BOT business, ownership, usufruct, use rights are defined and theircorresponding accounting elements are divided. On this basis, this article intensivelystudies the problem about current BOT accounting rules and carries out a detailedanalysis of these issues and improvement from the point of definition of propertyrights again. This paper argues that, concession should be confirmed as intangibleassets; project company should confirm operating income but not confirmconstruction income; accounting infrastructure construction spending from"Construction" subjects; accounting for subsequent expenditures respectivelyaccording to assets property rights; building assets inspection mechanism to manageinfrastructure assets; project company reflects the financial information of BOTcompletely from preparation accounting information disclosure statement of BOT business.This article embarks from the nature of BOT business, basing on property rightstheory, has put forward different solutions from traditional accounting treatment forBOT business. It drills down to the property accounting theory, and it is alsobeneficial attempt for BOT business accounting reform. In this paper, the researchresult will be conducive to further standardize the accounting treatment of BOTbusiness, and will improve the objectivity and authenticity of accounting information.