The Impact Analysis Of New Accounting Standard For Business Enterprises On Net Income Of Listed Companies

Ministry of Finance released officially the new Accounting Standard for Business Enterprises on February 15th 2006, including one basic standard and thirty-eight specific standards, which has become a milestone of Chinese accounting development history and indicates the preliminary accomplishment of launching the accounting standard for enterprises.The financial tsunami swept over the world economy since 2008. Many firms, especially listed companies in China, have been affected by this economic crisis. Because of that, assets value shrinks heavily and business performance goes with a big slump. This transition besides poor economic environment makes it necessary and possible for these companies who have poor business performances to conceal and beautify the difficult financial situation. The net income of listed companies may turn deficit to profit or turn profit to deficit just because of standard's transition if government's supervision is not appropriate. Therefore, it is obvious that researching the impact of new accounting standard for business enterprises on net income of listed companies is significant.Firstly the paper sums up a series of domestic and aboard documents, and analyzes the impact of new accounting standard for business enterprises on net income of listed companies with descriptive expression. Secondly the paper compares the specific standards between the former and the new such as income tax, recognition and measurement of financial instruments, impairment of assets, debt restructurings. It also analyzes and describes the overall impact of the new standards on the net income of listed companies with authentic cases from listed companies. At last, it summarizes several countermeasures when new standards are put into practice.This paper analyzes real cases deeply and it is easy to find out effects when a specific standard is put into practice, and obtain reasons for these changes.This paper just analyzes the effect on net income of listed companies, so this angle is a little narrow. What is more, all cases quoted in this paper are individual cases; it can just describe the effect of specific standards on the individual companies not the whole industry.