Does The New Income Standard Improve The Income Quality Of Enterprises?

Income is the economic benefit gained by an enterprise by using all resources in the whole business process,and it is not realized until the product is transformed into cash or other effective assets(Paton&Littleton,1940).As a yardstick to measure the profitability and economic value of enterprises,accurate measurement is not only the embodiment of income quality,but also the core issue of accounting research.The criteria for evaluating the quality of income come from factors such as the increase or decrease of income,the ability to realize and the structure of sources in business activities.at the same time,it will be affected by both the internal operating characteristics of the enterprise and the changes of the external institutional environment of the enterprise.In the process of global economic integration,the accounting systems of various countries show a trend of convergence around the international financial reporting standards.A high-quality standard system is not only closely related to the financial situation and operating results of enterprises,but also can effectively stabilize the capital market and optimize the allocation of economic resources.High-quality income is attached to the perfect accounting standards system and its effective implementation process,which can truly reflect the enterprise’s financial situation and operating results,and promote the optimal allocation of various elements of resources in the capital market.High-quality income is attached to the perfect accounting standards system and its effective implementation process,which can truly reflect the enterprise’s financial situation and operating results,and promote the optimal allocation of various elements of resources in the capital market.In 2017,the Ministry of Finance of China formally promulgated the "Accounting Standards for Enterprises No.14-Revenue"(CAS14(2017)),which converges with the International Financial reporting Standards15-Revenue(IFRS15).According to the guidelines,A + H-share listed companies take the lead in implementing CAS14(2017)when preparing financial reports for 2018,while other A-share listed companies in the transitional period of the standards will implement new income standards from 2020.CAS14(2017)standardizes the contractual relationship between the parties to the transaction with the idea of contract,divides the types of income in the form of contract with commercial substance,makes areasonable judgment and treatment of the transaction process with the "five-step method" confirmation model,and pays attention to the essence of the transaction process with the transfer of control as the basis for income realization.A unified revenue framework was incorporated into the original Accounting Standards for Enterprises No.15-Construction contracts(CAS15(2006)).So,will the change of income criteria improve the income quality of the enterprise or "swallow" the operating results of the enterprise?First of all,this paper analyzes the connotation and influencing factors of income quality through the essence of income definition.On the basis of using the existing income quality evaluation methods at home and abroad for reference,a comprehensive evaluation model which can effectively reflect the income quality of Chinese enterprises is constructed by using the method of factor analysis.Secondly,using the quasi-natural experimental conditions formed by the external policy shock of CAS14(2017)in time and space,this paper sets A + H-share listed companies and other A-share listed companies as the experimental group and control group respectively,selects the publicly disclosed financial report data from 2017 to 2018 as empirical evidence,and uses the double differential tendency score matching method(PSM-DID)to test the policy effect of the new income standards.The study found that,whether compared with the control group,or compared with the experimental group before the implementation of the guidelines,the comprehensive evaluation index of income quality of enterprises increased significantly after the implementation of the new income criteria.Further analysis shows that compared with state-owned enterprises,the improvement of income quality of non-state-owned enterprises is more significant after the implementation of the new income criteria.