Research On Debt Structure,Earnings Management And Debt Restructuring

Since the financial crisis in 2008,new production generated by the government's RMB 4 trillion investment to save the market has failed to find support for new demand,leading to serious overcapacity in traditional industries.China's listed companies that have experienced double leverage have currently experienced excessive debt burden.By the end of 2015,China's total debt was 168.48 trillion yuan,of which non-financial companies' leverage rate was as high as 156%,which was far more than 90%of the global alert level.Debt risks faced by companies are constantly rising,and their chances of getting into financial difficulties are greatly increased.When the debtor's debt defaults,the debtor is the most important method for the purpose of maximizing the recovery value.Whether or not the debt restructuring agreement can be reached depends on the information on future cash flow conditions reflected in the financial statements provided by the debtor.Debtors have incentives to manage earnings for debt restructuring contracts.So,does the financial distress company also have the incentive to manage earnings in order to reach a debt restructuring agreement?In the case of earnings management,the distressed company will show its downward management of earnings to be "abductions" of creditors,or will it be "inducing"creditors to show a better future for earnings management?In addition,there are differences in the expected cash flow and risks that different types of debt bring to the company.How do different debt structures affect the earnings management incentives in debt restructuring?This paper uses the literature research method and empirical test to study the impact of earnings management in debt restructuring on the basis of listed companies with financial distress between 2007 and 2016.It also includes the debt structure variable to demonstrate the debt structure and the surplus in debt restructuring.Management motivation and the impact of countermeasures.This article can be divided into the following sections:Part one is the exordium.The exordium introduces the setting and significance of the study,reviews the relevant literature,and expounds the research ideas,research methods and the innovation of this paper.Part two is the theoretical basis.This part firstly defines the related concepts,then expounds the theory of Soft budget constraint,the theory of debt restructuring,the theory of debt renegotiation,providing a theoretical basis for the latter bringing forward the hypothesis of this paper and the empirical analysis.Part three is the research hypothesis.On the basis of the second part,this part analyzes The influence of debt structure and debt restructuring on earnings management,then puts forward three hypotheses about the effect of debt restructuring on earnings management motivation,the effect of debt structure on debt restructuring and the effect of debt structure on earnings management in debt restructuringPart four is study design.This part mainly introduces the sample source,the data selection,the concept and measure of factor,the construction of the model.Part five is the empirical test and result analysis of the effect of debt restructuring on earnings management motivation.Part six is the empirical test and result analysis of the effect of debt structure on debt restructuring.Part seven is the empirical test and result analysis of the effect of debt structure on earnings management in debt restructuring.Part eight part is the conclusion.On the basis of the above,we draw the conclusions and implications of this study,and point out the shortcomings of this study and its fiuture prospects.On the basis oftheoretical and empirical analysis,we finally come to the conclusion.Firstly,The company's debt restructuring which in financial distress occurred in a significant positive correlation with its downward earnings management,and was significantly negatively correlated with upward earnings management.Secondly,In the impact of debt structure on debt restructuring,it is found that the higher the level of short-term debt,financial debt and mortgage debt,the easier the debt restructuring will be for distressed enterprises.Lastly,The influence of debt structure on earnings management motivation in debt restructuring:the higher the short-term debt level,financial debt and mortgage debt level,the stronger the downward earnings management motivation in the debt restructuring of distressed companies,and the stronger the inhibiting effect on the upward earnings management of their debt restructuring.There are two main points of innovation in this paper:First,The conclusion of the debt restructuring agreement as a motivation for earnings management has enriched the empirical research on earnings management incentives.Domestic scholars generally study debt restructuring as a means of earnings management.With the development of debt restructuring theory in China,the applicability of this view has begun to decline.This paper breaks the domestic scholars' original thinking,and takes the occurrence of debt restructuring as an empirical test of earnings management incentives.Second,Debt structure is refined to enrich debt structure and research on earnings management motivation in debt restructuring.In the analysis of the debt structure,this paper not only considers the general classification standards of scholars at home and abroad,but also divides the debt maturity structure and the debt source structure.It also examines whether there is a mortgage clause in the debt restructuring and the impact of earnings management incentives.