Research On The Impact Of The Expected Credit Loss Method In The Receivables Impairment Of ZH Company

The Ministry of Finance of China issued a new accounting standard for financial instruments in 2017,namely “Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments”,It is pointed out that all kinds of enterprises in China will fully implement the new financial instrument standard from 2021,and the expected credit loss method will be used to replace the incurred loss method when enterprises make impairment provision.At present,the existing literature on the impact of the implementation of the expected credit loss method on non-financial enterprises is relatively lacking.Therefore,exploring the impact of applying the expected credit loss method to non-financial enterprises can quickly discover the possible problems in the application of new method and improve the construction of the expected credit loss system about accounting standards of China.Meanwhile,it is helpful to reducing the mismatch in the application of the new method and promoting enterprises to form a complete internal accounting system.Under the research background of the introduction of the new financial instrument standards,this article is based on the relevant regulations and application guidelines in the new standards,and combined with the expected credit loss related domestic and foreign research results.The article takes an environmental protection enterprise ZH company’s financial assets-accounts receivables as the case object to carry out the impact of expected credit loss method,and provide certain data and evidence support for the subsequent formal implementation of the expected credit loss method to measure the impairment loss of the receivables.First of all,sort out the related development history,definition and confirmation methods of the expected credit loss,compare the difference between the expected credit loss method and the incurred loss method,and summarize the basic theoretical support related to the impact analysis.Secondly,on the basis of reviewing and analyzing the basic situation,operating situation and financial situation of receivables of ZH company,the article analyzes the current situation of ZH company’s impairment in four aspects,such as impairment provision’s policy selection,the proportion ratio,the scope and amount of impairment.It is found that ZH company has some problems in the provision of impairment of its receivables,including insufficient disclosure of credit risk,weak correlation of accounting information,lack of comprehensive management mechanism of bad debt loss and inability to objectively reflect the value of receivables.Thirdly,combined with the special work content of participating in the construction of the expected credit loss model of the ZH company and analyzing the specific ideas and parameter points of ZH company’s plan to formally implement the expected credit loss method,the article constructs the impairment model and calculates the expected credit loss for 2015-2019 receivables provision of ZH company under the new method.Then,comparing the impairment provision between two impairment provision methods of receivables,make an expected impact analysis from the aspects of impairment loss,asset and profits,financial status and financial index.The study found that the expected credit loss method can enhance the relevance of the quality of ZH’s accounting information,faithfully reflect the actual asset quality of ZH,fully reveal the credit risk of ZH,and is vulnerable to subjective factors when it is implemented.Finally,it puts forward the relevant countermeasures and suggestions for ZH company to further implement the expected credit loss method based on the research results.