The Impact Of New Revenue Standard On The Business Performance Of Software Enterprises

China’s Ministry of Finance issued the revised "accounting standards for Business Enterprises No.14-Revenue" in 2017,which is based on the balance sheet theory,unifies the revenue recognition and measurement principles and specific accounting treatment methods of all business types,and uses the "control" model instead of the "risk reward" model to judge the revenue recognition time,emphasizing the business model and legal binding force.At the same time,it makes special provisions on intellectual property,total amount method and net amount method.This means that the implementation of the new revenue standards will change the revenue recognition and measurement of some types of business,and then have an impact on business performance.The market value of Listed Companies in A-share software industry ranks the third.Studying how the new income standard affects the operating performance of listed software companies and the extent of the impact will provide guidance and reference for software companies and their stakeholders to understand the changes of the new income standard.Based on the comparison of the new and old income standards,this paper compares the main differences between the new and old income standards.The results show that the new and old income standards have changed in terms of objectives,scope of application,income recognition model,income measurement and presentation.The new revenue standard emphasizes the business model and legal binding force,puts forward the judgment standard of performance obligation identification and a period of revenue recognition time,and improves the measurement method of revenue recognition for a period of time.Compared with the old revenue standard,the operability,comprehensibility and comparability are obviously improved.After that,through the research on the income accounting policies of software listed companies,this paper finds that there are contradictions and uncertainties in the income recognition and measurement provisions of software enterprises under the old standards,and there are different accounting treatments for the same business in practice.According to the five step analysis of the new revenue standard,the recognition of the performance obligation of the new revenue standard,the judgment standard of recognizing the revenue for a period of time and the improvement of the measurement method of the completion progress effectively solve the problem of how to recognize the revenue of the special product of software intellectual property.However,the provisions of qualified collection right in the recognition standard of the new revenue standard for a period of time may also lead to different revenue recognition methods for the same business model due to different violation of the agreement,reducing the comparability of accounting information.Through the case study of company X,the results show that compared with the old standards,the profitability index,Solvency Index and business ability index of company X have decreased significantly.The main reason is that the amount of compensation for customer’s breach of contract of company X can’t make up the cost and reasonable profit,and can’t meet the standard of revenue recognition in the new revenue standard period.Therefore,for the software enterprises that used to recognize revenue according to the percentage of completion method,if the contract payment and customer default terms can not meet the standard of qualified collection right of the new revenue standard,the implementation of the new revenue standard will have a greater impact on their business performance.Among them,the longer the business time,the greater the impact.The operating performance of listed companies will directly affect the decision-making of investors and increase the difficulty of supervision.Therefore,the new income standard will have a comprehensive impact on the capital market.The implementation of the new income standard will be affected by individual contract terms,business practices,market environment,legal system and so on.The research on this aspect needs to be further studied,which also constitutes the direction of the follow-up in-depth research.