The Application And Impact Of New Revenue Standards In E-commerce Enterprises

In recent years,with the popularization of China's Internet and mobile payment,traditional offline retail companies have opened online retail businesses,and China's e-commerce companies have developed rapidly.As leaders in the e-commerce industry,major e-commerce enterprises provide platform services for various retail stores,and also actively develop self-operated stores and build supporting logistics and delivering systems.Therefore,e-commerce companies often have dual identities.As e-commerce enterprises' business models are complex,its revenue recognition and measurement are different from firms of other industries.The revision and promulgation of China Accounting Standards 14 will have a great impact on the revenue recognition and measurement of e-commerce enterprises.How to accurately understand and apply the new standards and make the transition from the old standards to the new standards will be a problem faced by e-commerce enterprises.This article first elaborates the research background and research significance and sorts out the domestic and foreign literature bases before outlining the background of the change in guidelines.Secondly,this article makes a specific interpretation of the new revenue standards by introducing the “five-step method” of revenue recognition and the new concept of contract costs.On this basis,the differences between the new and old standards are analyzed from the aspects of revenue recognition,measurement,and disclosure.Next,this article takes e-commerce enterprises as the starting point and introduces the business model and income types of e-commerce enterprises.It also analyzes the problems in the revenue recognition and measurement of e-commerce enterprises under the old standards.Afterwards,taking Suning as a case study,its e-commerce platform and self-operated store are identified as the agent and the principal respectively.And it introduces the accounting treatments of the relevant sales transactions under the new revenue standard as the agent and the principal respectively.Specifically,those sales related transactions include free-shipping and free-installing services,promotional offers and quality assurance services as the self-operated stores,as well as annual fees and commission income as the platform.On this basis,taking the point plan and bundling sales as examples,it shows the difference in revenue under the new and old standards and the impact it brings.And for Suning as an e-commerce platform,there still are problems related to the revenue recognition and measurement under the new standard for advertisement and membership revenue.The study found that the application of the new standard in e-commerce enterprises will bring the following impacts and problems.First,for the point plan,the old standard adopts the deferred income method.Compared with the old standard,the implementation of the new standard will increase the contract revenue and contract profit on the current year and reduce those on the following year,resulting in the payment of VAT and corporate income tax in advance.With other conditions unchanged,various profit indicators will have an upward trend on the current year.However,since the points-exchanging commodities are the main products and their revenue are included in the “main product revenue”,that point plan does not have an impact on the revenue composition.Second,for the bundled sales business,the new revenue standard will increase the proportion of data service revenue and increase the proportion of core business revenue when e-commerce companies are identified as platforms.At the same time,as service revenue needs to be apportioned in subsequent years,compared with the old standard,the contract revenue and contract profit in the current year will decline,which will have a negative impact on the current year's operating profit.In addition,the method for determining the processing under the new revenue standard is not applicable to Internet companies,so there is still uncertainty in the recognition and measurement of the advertising and membership revenue of the platform.Finally,based on the case analysis of Suning,this article separately proposes the following suggestions for e-commerce enterprises and new revenue standards: e-commerce enterprises should appropriately adjust the sales plan,such as adjusting the point conversion ratio,selecting low-value products to implement the point plan,extending the duration of service for bundled sales,thereby reducing the impact of new revenue standards.At the same time,e-commerce enterprises should also strengthen the management of customer contracts and pay attention to the disclosure of relevant information.Regarding new revenue standard,it should be refined from three aspects: refining the standard of control rights,introducing more determination method of the processing of the contract within a period,and strengthening of the guidance on the revenue of e-commerce consumer finance business.