Debt Restructuring And Earnings Management

Excessive asset-liability ratio has become common among listed companies.By the end of 2015,China's total debt had reached 168.48 trillion yuan,among which the leverage ratio of non-financial enterprises was as high as 156%,far higher than the global alert level of 90%.China's capital market has experienced two waves of restructuring in recent years,debt restructuring in listed companies increasingly frequent occurrence.Since the revision of the new criterion of debt restructuring in 2006,the new criterion and the old criterion have essential differences in the definition of debt restructuring.The Ministry of Finance's repeated revision of the code of debt restructuring shows that debt restructuring plays an important role in the market economy.Debt restructuring agreement reached depends mainly on the debt talks between creditor and debtor,generally have higher going-concern value compared to other companies easier to restructure its debt,so debt restructuring agreement reached,and the benefit of creditors depend on how the debtor to provide him the earnings information,then the debtor can by earnings management behavior to reach own purpose?Does the nature of enterprise property rights affect the earnings management behavior?At the same time,when choosing earnings management behavior,will companies in different circumstances choose upward earnings management behavior or downward earnings management behavior to improve their discourse power in the negotiation?Taking a sample of A-share listed companies undergoing debt restructuring from 2008 to 2018,this paper studies the earnings management behavior before debt restructuring of listed companies by means of literature research method and empirical test method.This article is mainly divided into the following parts:The first part is the introduction.This part mainly introduces the research background and significance of the article,reviews the relevant literature,and describes the research ideas,research methods,and innovation points of the article.The second part is the theoretical basis.First,this part defines the concept and index measurement of surplus management,debt restructuring and financial difficulties.Second,describes the theoretical basic contract theory,agency theory,and information asymmetry theory generated by earnings management behavior.It provides the theoretical basis for the post study hypothesis and the analysis of the empirical results.The third part is the research hypothesis.This part combined with the previous theoretical basis,verifies the existence of surplus management behavior before debt restructuring,and considers the nature of property rights and the impact of difficult conditions on it.This paper puts forward three assumptions about the existence of earnings management before debt restructuring,the impact of property rights on such earnings management behavior,and the difference between distressed and non-distressed enterprises 'earnings management behavior before debt restructuring.The fourth part is the research design.This part mainly introduces the article sample source,data selection,variable definition and model construction.The fifth part is the empirical test and the result analysis of the earnings management behavior before the debt restructuring.The sixth part is the robustness test.The seventh part is the conclusion.This paper focuses on the conclusions,policy recommendations,insufficient research and prospects.By combing relevant literatures and combining theoretical and empirical analysis,this paper finally draws the following conclusions:(1)Listed companies had earnings management behaviors before debt restructuring.(2)There are influence of property right nature on earnings management behavior before debt restructuring,it is found that non-state-owned enterprises' earnings management behavior before debt restructuring is more significant,and it is not found that state-owned enterprises have obvious earnings management behavior before debt restructuring.(3)Enterprises in distress are more likely to conduct debt restructuring,and enterprises in financial distress tend to conduct downward earnings management before restructuring,in order to obtain greater concessions from creditors;Non-financial distressed enterprises tend to conduct upward earnings management behavior before restructuring in order to avoid default,thus inhibiting the realization of debt restructuring.The innovation of this article mainly has two points:first,to study the relation between earnings management and debt restructuring,generally from debt restructuring motivation,the debt restructuring as a means for the study of surplus management,in this paper,the advance research of earnings management behavior before restructuring and considering the nature of property rights and the influence of dilemma situation,broaden the for the further study of the relationship between earnings management and debt restructuring.At the same time,from the event of debt restructuring,this paper studies the impact of the occurrence of a certain event on earnings management,and finds out under what circumstances the enterprise's earnings management behavior is more significant,which enriches the research content of the influencing factors of earnings management.Second,most current research related to debt restructuring is a financial distress enterprises as samples,this paper uses a sample of listed companies,at the same time,considering the difficulties with the dilemma on the direction of enterprise debt restructuring before earnings management behavior differences,enriched with the predicament enterprise debt restructuring related research content,but also enrich the research contents of debt restructuring.