Research On Perfect World's Revenue Recognition And Measurement

In July 2017,the Ministry of Finance of China issued a new revised revenue standard,which created the same revenue recognition model for domestic companies.As a member of the Internet's emerging industry,online game companies have certain characteristics and complexity,which brings certain challenges to the implementation of income standards.Moreover,the new revenue standard is only based on principles,and no practical application guide is provided for specific industries and specific businesses.How to apply the new revenue standards for revenue recognition is an important challenge for online game companies.Perfect World Co.,Ltd.(hereinafter referred to as "Perfect World")is a well-known domestic complex.Its business model and revenue recognition method used are also more advanced and common,and are typical representatives of the industry.Based on the empirical analysis of the impact of the new accounting standards on the financial status of listed companies using the OLS model,this paper uses the perfect world as an example,using case studies and literature research methods to sort out the online game market profile and online game income characteristics,based on China's upcoming "New Income Standards" explores and analyzes the problems of Perfect World's income recognition and income measurement,and proposes improvements.The contribution is mainly reflected in:(1)Through the empirical analysis of the impact of the new Standard on the financial status of foreign-listed online game companies,it is concluded that the implementation of the new standard is significantly related to the profitability index and short-term solvency index of the company.The impact of the analogous new income standard on the financial status of enterprises after implementation in 2020.(2)A comprehensive overview of the development status of China's online game industry and analysis of its revenue recognition characteristics under the current revenue standards.(3)By analyzing the operation mode,revenue recognition and measurement methods of Perfect World,and providing more appropriate accounting treatment methods according to the requirements of the new revenue standards,it can provide practical treatment for China's new Internet companies such as online game companies to adapt to the new revenue standards For reference.The conclusions are as follows:(1)The timing of revenue recognition for Perfect World virtual props is unclear,and deferred revenue should be first recorded and then selected according to the actual use status of props.(2)Perfect World has not conducted fair value allocation accounting for promotional activities.The agreement for identifying elements according to the performance obligation should be recognized.The donated part is first recorded as a liability,and the consideration obtained from the sale of virtual goods is converted into an appropriate fair value.(3)Perfect World's one-time confirmation of settled income at the end of the game will lead to a surge in revenue during the recession of the game,which violates the reliability principle of the financial statements.(4)Perfect World should adjust the accounts receivable corresponding to unfulfilled performance obligations as contract assets in accordance with the new income standard,list contract liabilities,and reduce advance receipts.