The Financial Impact Of The Revised Long-term Equity Investment Criteria On Enterprises

Long-term equity investment means that the investor obtains the equity of the investee through the investment behavior.For a long time,investment activities account for a large proportion of the business activities of enterprises,especially the listed companies.Therefore,one of the important concerns of accounting standards setting institutions is to standardize the accounting and related information disclosure related to enterprise investment activities.The ministry of finance issued the revised version of accounting standards for business enterprises no.2--long-term equity investment on March 13,2014.It is also stipulated that it shall be implemented within the scope of all enterprises implementing the accounting standards for enterprises as of July 1,2014.Compared with the long-term equity investment guidelines issued in 2006,the revised long-term equity investment guidelines in 2014 made some changes,including the change of definition scope of long-term equity investment,the change of initial measurement of long-term equity investment,and the change of follow-up measurement of long-term equity investment.One of the highlights of the revised long-term equity investment criteria is to narrow the scope of application of long-term equity investment accounting,"To the invested enterprises do not have control,joint control or significant influence,and has no offer in the active market and the equity investment" of the fair value cannot be reliably measured in the accounting standards for enterprises no.22-recognition and measurement of financial instruments in the recognition and measurement,realize the further convergence with international accounting standards.At the same time,with the continuous development of China’s capital market,the trend of a long-term equity investment of listed companies is more and more obvious,especially for the real estate industry,real estate industry long-term equity investment absolute showing a rising trend year by year,One of the reasons is that the real estate developers through the long-term equity investment alternative auction to take the land,developer competition from land to equity;Another reason is that property developers are increasingly getting together to get land.Therefore,it is very meaningful to analyze the financial impact of the revised long-term equity investment criteria on enterprises by taking listed companies in the real estate industry as samples.Therefore,this paper will make a quantitative analysis of the impact of the implementation of the revised long-term equity investment criteria on corporate finance based on the changes in the long-term equity investment before and after the revision of the criteria of 115 A-share real estate listed companies in Shanghai and Shenzhen.This paper attempts to transform the changes of the revised long-term equity investment criteria from abstract theoretical research to specific data for analysis.First of all,this paper first compares China’s revised long-term equity investment standard with the old standard and international standard,and summarizes the advantages of the revised long-term equity investment standard and the convergence with international standard..Secondly,on the basis of the above theory and by hand consulting the annual report,the implementation situation of listed companies in Shanghai and Shenzhen a-share real estate industry on the revised long-term equity investment criteria is calculated.Then,the impact of the implementation of the revised long-term equity investment criteria on the financial statements of listed companies in the real estate industry is analyzed in detail.Finally,according to the above analysis,the deficiencies of the revised long-term equity investment criteria and corresponding improvement Suggestions are demonstrated,in the hope of promoting the theoretical research and improvement of China’s long-term equity investment criteria.This paper consists of seven parts:The first part is the theoretical basis of the paper.This part mainly elaborates the research background,research significance,research ideas and methods of this topic,and preliminarily analyzes the re-classification of the revised long-term equity investment criteria,the change of measurement methods and the influence on all aspects of a-share real estate listed companies,and points out the innovation points of this paper.The second part is the literature review.This part through the domestic and foreign literature review of long-term equity investment,for the follow-up research laid a theoretical foundation.The third part compares China’s revised long-term equity investment criteria with the original long-term equity investment criteria and international standards,and summarizes the advantages of the revised long-term equity investment criteria and the convergence with international standards.The fourth part is A detailed analysis of the implementation of the revised long-term equity investment criteria in 115 shanghai-shenzhen a-share real estate listed companies.By manually reading the annual report,the disclosure and specific implementation of the change of long-term equity investment criteria of a-share real estate listed companies were explored.The fifth part of the a-share listed 115 real estate companies to further analysis and put forward the existing problems.The sixth part puts forward some Suggestions and countermeasures.Through the summary of this paper,the existing problems of the revised criteria for long-term equity investment are found,and the countermeasures and Suggestions for the application policy of long-term equity investment in China are put forward.This part and the fifth part correspond to each other from the logic level,dig the real reason behind the problem,and put forward feasible Suggestions and countermeasures from the source.The seventh part is the conclusion and prospect.Based on the analysis above,the conclusion is drawn,and the deficiency of this paper is put forward,and the future research in this direction is prospected.