Effects Of Long-term Asset Impairment On Accounting Information Quality

In order to meet the needs of China's economic development and enterprises to participate in international competitions,China's Ministry of Finance promulgated the "Accounting Standards for Business Enterprises" in 2006,which serves the country's current economic environment.The historical evolution of China's asset impairment accounting is a representative of the reform of China's accounting standards.The purpose of asset impairment accounting is to provide information such as asset value and economic decision-making information to report users by providing information on the value of assets.On the basis of reference to international accounting standards,China has promulgated independent criteria for long-term asset impairment.The impairment criterion contains various accounting policies for long term assets in the preparation of impairment reduction,and the confirmation conditions and handling methods for signs of impairment.However,there is a substantial difference between China's long-term asset depreciation preparations and international accounting standards.China's accounting standards are not allowed to turn back,but the international accounting standards are contrary to the proposed loss of long-term assets.The rule could reduce the use of long-term write-downs by listed companies to inflate profits.However,this provision negates the impact of economic factors on the value of assets and undermines the relevance of accounting information.Therefore,whether this provision can meet the original intention of the accounting standards and whether it is reasonable to prohibit the reversal of long-term asset impairment losses,this paper has carried out research on these issues.This paper adopts the method of combining normative research with empirical research.This paper classifies the previous literature,and summarizes the literature from three aspects of the reasons,the relevance of the asset impairment information and the reliability of the asset impairment information,and paves the way for the later writing.This article analyzes the theoretical basis of asset impairment and changes of asset impairment policy in our country.Then it discusses the rationality of whether long-term asset impairment reserves can be reversed.The theoretical analysis lays the foundation for the empirical test.Then it empirically tests the value relevance and reliability of the long-term asset depreciation information,using the accounting datas related to the long-term assets impairment of listed companies in the old accounting standards stage and the current accounting standards stage.Through empirical tests,this article has reached the following conclusions.In the current accounting standards phase,long-term asset depreciation information does not have an incremental value correlation,but in the old accounting standards phase,the conclusion is opposite.The reliability of long-term asset depreciation information is enhanced compared to the old accounting standards stage.Although the empirical datas show that the reliability of long-term asset impairment information is enhanced at the current accounting standards stage,its relevance is reduced because long-term asset impairment losses cannot be reversed once accruals are reversed.Therefore,this article believes that the standard should be revised,and allow the loss of long-term assets to be reversed if the conditions are reasonable.In view of the possibility of revision of the criteria in the future,this article puts forward some operational suggestions from the perspective of how to reverse the impairment loss of long-term assets.