Study Of The Improvement Of ASBE 36-Related Party Disclosures

Related party transactions have been always a hotspot among topics concerning securities business. In China, related party transactions are very frequent and complex, which have influenced the company's financial conditions, profit or loss and cash flows. Therefore, how to standardize the information disclosures of related party transactions is an important aspect in the research of our accounting standards. The first specific accounting standard in our country is just to prescribe the disclosures for related party relationships and related party transactions. But as related party transactions have developed and changed a lot, the old accounting standard has obviously fell short of the ability to standardize them. In 2006, the was issued. Whether the new accounting standard can solve the existent problems of related party transactions and whether the new standard has any shortage and how to improve are the main issues studied in this thesis.The thesis starts with the introduction of the background of the research. Through the review of the literature, the thesis introduces the actuality of the related party transactions and the problems in standardizing the information disclosures of the related party transactions. And then, thesis explains the significance of the research and the methodology of the research, etc. Secondly, based on the comparison of the main overseas accounting standards of related party disclosures, the old accounting standard in our country with the new accounting standard of related party disclosures, the thesis analyzes and observes on the new accounting standard. The thesis summarizes the strong points and the weak points of the new accounting standard, for the sake of improving the standard. On the basis of the above mentioned works, the thesis argues in detail the suggestions which the author bring forward to improve the new accounting standard of related party disclosures. The suggestions include that the new standard should make clear its objective and orientation and the new standard should also emphasize the principle of Substance over Form" as the criterion to recognize the related party relationships. Specially, consulting the recent research result of International Accounting Standard Committee, the thesis provides an indicator to judge whether the entities which are simply subject to control from the State should be regarded as related parties. Besides that, the thesis expounds amply the criterion of the disclosures of the pricing policies and the disclosures of the key management personnel compensation. Finally, the thesis quotes the <2007 Annual Report> of Wuliangye Yibin Co.,LTD as an case study. On one side, as the practical application of the new accounting standard of related party disclosures, the thesis points out the strong points and the weak points of the new standard. On the other side, the thesis applies the mentioned suggestions to the new accounting standard to the case, just as a demonstration of the disclosures, in order to contact the theory with the practice and then to promote the improvement of the accounting principle and guide the practice better.