Research On The Impairment Of M Securities Company’s Bond Business Based On The New Financial Instrument Standards

In recent years,with the further opening and development of the capital market,the bond investment business of securities companies has entered a period of rapid development.The scale and the variety of investment in bond business are increasing;However,with the policy guidance of "breaking the rigid cashing of investment",the risk of bond business is also accumulating.At the same time,the accounting standards for financial instruments related to bond business are also continuously revised.The IFRS 9 issued by the International Accounting Standards Committee in 2014 not only adjusted the classification of financial instruments from "four categories" to "three categories",but also adjusted the impairment method of financial instruments from "incurred loss method" to "expected credit loss method".In 2017,the Ministry of Finance of the People’s Republic of China revised and issued the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments and other new financial instrument standards in accordance with the strategic principle of comprehensive convergence with the International Accounting Standards;It also requires listed securities companies to use the expected credit loss model to carry out the impairment of financial instruments since 2019.In view of the fact that the bond business is one of the most important investment businesses of securities companies,and the implementation time of using the expected credit loss method to withdraw the impairment of financial instruments is relatively short,there is less research on the impairment of bond business in China.Under this background,this thesis takes M Securities Company as an example to study the impairment of bond business under the implementation of the new financial instrument standards.The research methods of this thesis mainly include literature research,case study,comparative analysis and quantitative analysis.Firstly,based on the summary of literature related to impairment of financial instruments both domestically and internationally,this thesis elaborates on the concepts related to impairment,and briefly analyzes the requirements for impairment of financial instruments in combination with accounting objective theory,accounting information quality theory,and principal-agent theory.Secondly,it briefly introduces the bond business,including its bond varieties,transaction types,impairment accounting treatment,etc.,and selects M Securities Company,a widely representative small and medium-sized securities company,as the object of the case study to analyze its business development status.Thirdly,on the basis of introducing how M Securities Company uses expected credit loss model to deal with the impairment of the bond business,the research focuses on reflecting the problems and causes caused by the selection of impairment model parameters,the limitations of the impairment model itself,the lack of comparability in the process of impairment provision,the distribution of bond positions and the performance problems caused by impairment.Finally,corresponding optimization analysis and suggestions are put forward for the above problems.The research conclusions of this thesis are mainly divided into two dimensions.The first is based on the optimization and improvement of the subject of the case study,including the adjustment of the bond rating scheme,the acquisition of the default loss rate of the subdivided industry,the reasonable investment structure of bonds,and the improvement of the performance evaluation indicators;The second is that it cannot be solved by a single securities company,and it is hoped that the industry,association and regulatory appeal measures will be taken,including the establishment of unified impairment standards,more dimensional accounting information disclosure and data co-construction and sharing.In the long run,no matter for the improvement of the quality of accounting information,the necessity of external supervision and the rational appeal of the industry’s internal practitioners,a unified and clear detailed criteria for impairment of financial instruments is essential.