New accounting standards on financial information

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New accounting standards on financial information of listed companies of

New accounting standards on financial information of listed companies in line with the impact of capital market development, and improve various types of enterprises, especially the quality of financial information of listed companies to enhance the transparency of their business information. Ministry of Finance on February 15, 2006 issued a circular, announced January 1, 2007 listed companies since the first implementation of the new corporate accounting standards, encourage the implementation of other companies; the same time, no implementation of the existing accounting standards and . New accounting standards, including one by the basic norms of 38 specific standards and related application notes constitute the new enterprise accounting standards. The Accounting Standards issued by the current enterprise covers many aspects of economic activities, many of the issues involved are the criteria for new things in recent years, new methods or new approaches, not only to fill the conditions of market economy provisions of the new economy business accounting gaps in the recognition and measurement of assets, disclosure of accounting standards and the older areas closer to international practices, operation of the accounting practice and more scientific. Compared with the old accounting standards, changes in the new guidelines, mainly reflected in the cautious introduction of fair value measurement method and non-monetary assets, investment property, debt restructuring, asset impairment, financial instruments, stock, stock options, share-based payment specific accounting standards and other content, on the impact of the financial data of listed companies may be relatively large. (A) of prudent introduction of fair value measurement methods, increase the operating results of the instability. The purpose of the new accounting standards is to provide accounting information to more truly reflect the economic substance of business, and making more useful. Therefore, the full introduction of new accounting standards of fair value measurement attribute, give the company greater autonomy to the company based on expected changes in the economic adjustment of the accounting policy, which is the new accounting standards a highlight. The new standards system in the investment real estate, non-business combination under common control, debt restructuring in the fair value and allow the debtor to confirm the reorganization proceeds, non-monetary transactions recognized at fair value of the assets and revenue recognition aspects, such as replacement use of fair value. Determine the fair value of the subjective and arbitrary large, which increases the instability of the operating results, Therefore, enterprises need to be fully explained to investors that the measurement of the impact on the financial statements. (B) cancel the transfer LIFO inventory method, without taking into account inflation. Cancel real reason is the cost of the logistics flow and consistent in most cases, not a true reflection of inventory flow. In theory, companies from the LIFO method to other methods, such as the FIFO method, will cause fluctuations in gross profit enterprises. And if inflation in a market environment, the use of LIFO can lower taxes, a move towards FIFO will bad for business. Was originally a However,[link widoczny dla zalogowanych], due to inflation, in the current economic environment, without consideration, therefore, cancel the LIFO method is adopted, the impact of corporate liquidity position also depends on its stock, raw material price fluctuations and other factors. (C) Provision for asset impairment, the impairment provision for manipulation by profit, the new guidelines have a number of asset impairment provision shall not be reversed once blocked the way to manipulate profits of listed companies This is also the new accounting standards with International Financial Reporting Standards One of the substantive differences. Thus, before the implementation of new accounting standards may be listed before reversal of provision for impairment of assets to release hidden profits. From the listed company's actual impairment provision of view, some impairment of the company even more than the current net profit, assuming the current impaired assets and impairment of long-term equity investment in a relatively large amount of listed companies in 2006 Reversal of impairment of concentration of some assets, the report will result in a substantial increase in profits, asset impairment reversal is clearly focused on listed companies will have the book in 2006 to enhance the level of performance a huge impact. The new standards system expanded the scope of impairment of assets: fixed assets, intangible assets, equity investments, goodwill, production of biological assets, mining rights and interests in subsidiaries, associates and joint venture investment, and clearly a number of impairment of assets, and the recoverable amount is the sales price less disposal costs agreement after the estimated future cash flows or net present value of the higher. (Iv) debt restructuring to the debtor to clear the premise of the financial crisis, debt restructuring included in operating income, not included in capital surplus. Current guidelines do not allow the debtor to the creditor for the reorganization of the concessions revenue is recognized only in capital reserve. The new system is included in the debt restructuring operating income, debt service for the kind introduction of fair value measurement attribute. In other words, debt restructuring as a non-recurring gain or loss of profits through profit or loss, to the profits of listed companies. Therefore, the higher the amount of those liabilities, there may be debt forgiveness company, its earnings per share after the implementation of the new standards will sharply rise. Under the new accounting standards, listed companies may generate huge profits due to debt forgiveness. ST companies, but still can not imagine relying on debt restructuring to benefit the hat, Reaching for the Stars. The reason is that listed companies hat, Reaching for the Stars on condition that profit after deducting non-recurring net profit is positive. (E) Replacement value of assets accounted for the problem, not the book value of assets surrendered the basis of confirmation, and to confirm the fair value-based, non-monetary transactions at fair value and the assessed valuation. Current guidelines stipulate that the book value of assets surrendered to confirm for the book value of assets, the new accounting rules should be non-monetary assets at fair value and related tax to be paid for the cost of assets, so that the fair value and for the difference between the book value of assets through profit or loss results will be profitable, while the previous method used in basic book value does not produce profits. In particular the above provisions, if an association between two parties that may result in the exchange does not have commercial substance. (F) to expand the scope of the consolidated financial statements and more concerned about the substantive control. New standards and the need to be able to control the subsidiaries included in scope of consolidation, but not necessarily take into account ownership. Criteria for excluding proportional consolidation method, but require quite different business and a subsidiary of the parent company should also be included in the consolidation scope. A subsidiary of owner's equity is negative, as long as a going concern should also be included in the consolidation scope. Currently most of China's business combination business combination under common control, which is not necessarily the merging parties and the parties were both entirely voluntary merger of the transactions, the merger consideration is not the result of bargaining between the two sides, does not represent fair value, and therefore book value as the basis of accounting in order to avoid profit manipulation. Under common control business combinations (including the merger and new combined) because of the bargaining, the result of voluntary transactions between the two sides, it is recognized by both the fair value and confirm the purchase of goodwill. (Vii) expanding the range of capitalization of borrowing costs, the general borrowing can also be capitalized. The new standard requires that if the underlying asset purchase or production takes a special addition to the general loan borrowers, was occupied by the borrower's interest to allow the general included in the asset, that is, assets may be capitalized no longer limited to the use of specialized acquisition and construction loan fixed assets, but also including general borrowings. (H) increasing the equity incentive for employees. Completed the split share reform of listed companies in the equity incentive plan will be implemented, and the new Implementation of equity incentive plans of listed companies, will change the way the company to pay labor costs, thereby changing the flow of cash flows. But the listed companies to key management personnel and key employees an equity incentive effect on firm value is difficult to judge. Listed companies, probably because after the implementation of equity incentive, to ensure that the valuable human resources to win in the competition; it is also likely to give excessive incentives for employees, so that damage to corporate value. (I) amortization of intangible assets in the form a flexible, to give businesses more choices. New guidelines on the amortization of intangible assets are no longer limited to straight-line method and the amortization period is no longer fixed, to give businesses more choices. Therefore, the enterprise may be accelerated by reducing the amortization period and amortization to increase the company's performance, or the opposite way to reduce the performance, to achieve the purpose of earnings management. Can be seen, the new accounting standards from a technical point of view is not a simple financial reporting model of the original patch, but from the perspective of the conceptual framework of financial reporting conducted a systematic study. Foreseeable historic change of accounting standards, may greatly change the financial statement data; will be handling the accounts of listed companies, financial management, a profound impact on operating mode; the same time will also be related to the investment of listed companies value of the assets and results of operations have a significant impact, which led to the revaluation of assets of listed companies, the profits of listed companies changed greatly in the short term, significant impact on listed companies or potential effects that may affect share two market trend. Earnings quality assessment is an important part of financial evaluation. In the long run, the implementation of new guidelines to curb corporate profits will be manipulated earnings for listed companies to create a good environment quality evaluation. Full account of the new accounting standards of China special economic environment and accounting environment, amended a number of business accounting standards, these specific measures earnings of listed companies to provide more standardized information, reasonable, human factors have to eliminate the interference, improve the quality of earnings, earnings Evaluation of the objective environment can be improved. However, this requires listed companies to improve the situation for a long time-consuming to adapt and effort. In addition, the implementation of new standards, financial management of enterprises put forward higher requirements on financial management will also have a significant impact, you need to adjust, to adapt to new changes: (a) to adapt to the new accounting system need to change the accounting treatment processes, strengthen internal control of accounting. New guidelines on corporate economic and business transactions that may occur for a full range of accounting provisions of the existing accounting standards and have a greater difference in the recognition and measurement of accounting elements, accounting statements and presentation of Dengjun significant changes in corporate accounting accounting accounts, content, and part of the accounting processes need to be changed to require corresponding changes in corporate financial management to meet the requirements of the new accounting system; the same time, companies need systems and establishing new standards according to their specific circumstances accounting approach. In addition, the implementation of the new guidelines need more professional judgments, the internal control system of the enterprise system, the implementation of internal control processes, higher demands on the quality level of financial officers also made higher demands. (B) the need to further strengthen the management of corporate financial information systems. Accounting accounts, reports a direct result of the restructuring of corporate financial information systems and related functions to adjust, and fair value, the impairment provision requires a lot of basic data such as support, companies need to improve by themselves or through the software development feature upgrade to support business functional conversion. In addition, the use of fair value measurement basis, the need for timely changes reflect the underlying corporate assets, business risks, enterprises need to use information systems, the establishment of a risk warning system and timely to support the use of fair value. (C) needs to change to profit as the core budget management control system. Implementation of new accounting standards within and outside the enterprise environment, budget management, financial condition and operating results have an impact, companies need to reconsider the budget for scientific index system, the effectiveness of the business guidance and incentives need to be more concerned about cash flow, asset quality, operational risk management, the revised performance evaluation indicators, to enable enterprises to shift the focus more attention to the income statement balance sheet and cash flow, corporate profit as the core budget management and control system needs to change. (D) the need to change the investment management. New standards for reclassification of investment, according to management objectives into trading or held to maturity or held for sale, the appropriate use of public value measurement methods or amortized cost, while corporate investment in the accounting business risk in full to reveal and reflect the requirements of the different investment products and investment projects to use different conditions for different accounting standards and accounting norms, increasing the difficulty of professional judgments on the investment management business made a higher demand. (E) the need to strengthen the work of the tax basis of accounting. New guidelines will be revenue recognition, asset valuation, the fair value of the use and cost of capital of many aspects of treatment have different tax rules, companies need to be analyzed to determine the difference between the two, the correct calculation of tax according to tax regulations, and the need to follow the assets and liabilities Each statement basis of assets and liabilities, accounting deferred tax assets and deferred income tax liabilities, the need to strengthen the work of the tax basis of accounting. (F) the need to adjust the dividend distribution policy. Dividend policy is an important financial management policy, is directly related to the interests of investors and the company's capital structure. Of listed companies, the company dividend policy will impact the market price of its stock. The implementation of new accounting standards, assets, liabilities, classification and some pricing changes, particularly the introduction of fair value measurement model, led to the current period financial statements reflect the allocation of net profit and profit targets for such changes, companies book profits includes not only the embodiment of their own operating results, including changes in the environment outside the company's impact on the profits that unrealized gains and losses (fair value and the difference between the book value through profit or loss should be directed), this part is no corresponding cash profit stream support and, therefore, the dividend distribution policy should be considered internal and external factors, and adjust the company's dividend distribution policy. Implement new accounting standards system of corporate governance practices of listed companies the positive interaction, to improve the quality of accounting information play an active role. New concept of the new accounting standards on the disclosure of accounting information requirements of a higher, which is conducive to strengthening the regulatory authorities and all levels within the enterprise, investors especially small investors and enterprises to communicate and exchange, and promote. Effective incentive, monitoring and restricting mechanism for listed companies eventually will lead to international convergence of corporate governance and enhance the good image of China's enterprises.