| The main purpose of derivatives in early birth is to risk management,and this role was confirmed in early enterprise practice.At present,the pace of economic globalization has accelerated,Accompanied by the huge fluctuations in the prices of commodities and financial markets,the associated market risks have become increasingly prominent.With the development of theory and practice,more and more companies are beginning to use derivatives as a new business tool,and their application is also deepening.As a company's "double-edged sword",derivatives have attracted more and more attention.China,which is committed to going global,is also facing the risk of sharp fluctuations in prices,interest rates,and exchange rates.In 2008,the global economic crisis has caused huge losses to a large number of Chinese companies.Derivatives,served as fuses and amplifiers,pushed to the cusp of the storm,causing great controversy once again.As the economy becomes increasingly globalized and financial instruments continue to innovate,derivative instruments,due to their high leverage and vagueness of disclosure,have enabled them to have a strong ability to adjust reporting data.They have gradually become an important means for companies to perform earnings management and increasingly playing as an complex role.On the basis of sorts out related documents,the article redefined the concepts of derivatives and earnings management,then analyzed the former's impact on the latter at the theoretical level.Secondly,using a case of Huaneng Power International,INC.,on the basis of sorting out its 2012-2016 derivatives data and comprehensively analyzing its operational risks,analyzed the measurement model and financial consequences from the perspective of qualitative and quantitative.Finally draw the following conclusions:(1)Due to misjudgments in fuel price,exchange rate,and interest rate fluctuations,the use of Huaneng Power International,INC.'s derivative instruments,whether in terms of prevention or control of risks or net profit,was failed;(2)Derivatives have positive and negative effects on corporate net profit.They are mainly realized through changes in fair value,which are reflected in the changes in investment income,financial expenses,other comprehensive income and main operating costs,and ultimately aggravate the earnings management of the company;(3)The impact of derivatives on corporate earnings management is lagging behind,and because of the subjective nature of its accounting treatment methods,its influence is stronger than traditional earnings management methods.Finally,In order to provide assistance for the correct use of corporate management's derivatives,for investors to make correct investment decisions,and for supervision of regulatory authorities,gives advices from various perspectives.This article mainly adopts the case study method.On the one hand,it enriches the research on the financial consequences of derivative instruments.On the other hand,there are few articles on the enterprise's earnings management from the perspective of derivatives,and many of them are empirical studies.Through this case study,the article expands the research perspective of earnings management. |
