A Research On The Information Of Non-recurring Profit And Loss Of Chinese Listed Corporation

According to the size of sustainable, income can be divided into regular income and non-recurrent income, recurring income is generated by the company’s business activities. Investors predict the future profitability of the company trend by the characteristics of stability and continuity. Extraordinary just the opposite, non-recurrent income have poor predictability for investors, coupled with emergence of some listed companies using the non-recurring profits and losses for surplus operations. In this context, the Commission issued about non-recurring gains and losses, in order to suppress undesirable phenomena occurring, protect investors. Specification from the non-recurring gains and losses in development, the Commission listed the project are basing on the emerged the matters, standard lag behind practice. From the point of view in protecting investors, this approach is good, but looking closer scrutiny, it may be unfair to other listed companies, because not all non-recurring gains and losses incurred by an enterprise are a prelude for earnings management. Many non-recurring gain or loss happens due to production and operation of real needs. Therefore, we need place non-recurring gains and losses in the listed companies. We treat their occurrence, basing on if improving the competitiveness of the company’s actual benefit. This article bases on this understand, we select a study on information of non-recurring profit and loss information as the topic of the paper, holding that such a study makes sense. Our research is to distinguish which is legal and which is illegal, basing on the occurrence of non-recurring items if improving the company’s main business and other business competitiveness or not.In this paper, we combine theoretical methods with case research, in order to analysis the projects of non-recurring gains and losses.The use of cases in the form of non-recurrent profit and loss information validate the theoretical analysis. This paper includes six parts in the following:The first part is an introduction. In this section, we mainly introduce research background and the reasons for topics, and then the research contents and research methods, the last major referring innovation and inadequacies.The second part is the literature review. Literature review have three aspects: non-recurring gains and losses disclosed the specific details and specifications of the project, using the non-recurring gains and losses for operating surplus in the listed companies, as well as non-recurring profit and loss information’s market reaction on the issue, and finally studying a literature evaluation in a word.The third part analysis related theoretical about non-recurring gains and losses. Non-recurring gains and losses from the target point with the accounting disclosure depth of their theoretical analysis, non-recurring gains and losses from the current business outlook and perspective view of the profit and loss account from the full breadth of its in-depth analysis.The fourth part includes connotation of non-recurring items and the changes for norms of the System. China Securities Regulatory Commission definite non-recurring gains and losses, as well as the International Accounting Standards Board.Finally we compare with their different definition.Changes in the system: the changes of norms about gains and losses in our country have done four changes, this paper analyzes specification about it, comparing the new norms issued with the old norms.Part V analyzes information of non-recurring gains and lose, which is our focus. Due to limitations of space, this article does not cite the SFC analysis of all projects, just select the capital markets frequently used items in the listed companies, and select the appropriate case for doing the analysis described.Part VI includes the conclusions of this study and policy recommendations.Conclusions of this study:The high profitability of listed companies use a smooth non-recurring income or losses.Securities Regulatory Commission to achieve the follow-up financing of listed companies (issuing) a necessary condition:the weighted average of the three most recent fiscal year, the average return on net assets of not less than 6%, excluding non-recurring profit and net profit after deduction of the net before profits compared to the lower of weighted average net assets as the calculation basis of yield. Listed companies through the normal business activities if the profit would not meet the requirements, there will be a strong motivation for the use of non-recurring gains and losses quick way to achieve additional offering of the ROE requirements. The usual practice is to make non-recurring gains and losses as negative, but not the formation of the impact of operating profit, net profit after deduction of such deduction to be higher before, in order to gain additional rights. Studies also show that the classification of the listed company transfer phenomenon, that a listed company in accordance with the need to profit or loss classified as regular or non-recurrent gains and losses, this does not change the total amount of annual net profit, but to raise or lower the net profit after non-recurring net profit, catered to the profitability of securities analysts. Transfer of the classification of indirect and hidden, often difficult to detect, for such operations generally need to have superb technique, if not detailed study of these issues, the investors in their decisions can easily be misleading, so Classification of the Transfer of the company is very important, will be the focus of future research.(2)listed companies adjust the non-recurring profits with profit or loss, avoiding losses, if there is a big loss, it is difficult to make up this part of the profit or loss by the loss of the normal gap.The company in terms of more realistic and feasible is the only non-recurring gains and losses through the operation.(3)The listed companies improve the operating situation through non-recurring gains and losses.Listed companies use the current adverse business conditions so as to improve their competitive strength.(4)The cause of listed companies using non-recurring gains and losses for operating profit.Policy recommendations:ST and other penalties for listed companies is mainly basing on the identification the attributable profit to share holders, rather than the company’s profit after deducting non-recurring net profit. Such requirements induce the listed companies to increase net profit, lacking of sufficient attention on business profits, because it’s a shortcut to increase profits by the non-recurring gains and losses. Therefore, Commission should not make the right specification instead of the accounting standard-setting structure, thus ending the long-standing norms and standards is inconsistent. Enable the SFC to focus on securities market regulation, not minding the performance of some of the functions of standard-setting bodies.Two pairs of indicators of performance evaluation of listed companies are no longer simple to the net profit of listed companies as the standard. In order for listed companies focus on their business activities, the regulatory body is necessary to profit after deducting non-recurring net profit into the examination of the index category, and thus the source where the use of non-recurring profits and losses of the phenomenon of surplus operations to implement effective inhibition.As well as illness and death, there are cycles in nature, which is the law of nature. The same is true of listed companies, a company come in relation to delisting. However, A-share market in Shanghai and Shenzhen stock markets, there are super penny stocks that would not be treated. It’s normal for them to not be allowed to withdraw from the market, reflecting the soft underbelly of the policy. There are no prospects, no everything, but they have the "shell", the lack of exiting mechanisms, the lack of normal hematopoietic function, A-share market has to reverse out of incredible proportions.So it’s critical to establish an effective exit system. Reach the relevant indicators for listed companies must be resolutely delisting, to eliminate the current stock market listed companies to enter the ST and * ST vicious circle(3)Establishing effective mechanisms about transfer boardPresently, the Main Board of the SME board, the Third Market, as well as the GEM, if the implementation of the Transfer system meet the conditions, listed companies from GEM can join in the Main Board, poor performance of listed companies meeting the delisting criteria must withdraw Main Board. Performance improvement and meeting the conditions again can be re-listed on the back.Therefore, the three board companies can also go to GEM. Main Board listed companies, the SME board, the GEM.The three board flow and the different levels of the market to find the match with their listed companies, listed companies find the right market. Different companies have different markets, different markets have different valuation systems, so the market can be active, the price discovery function of the product would be achieved. As a result, China’s capital market, the lack of delisting, the delisting system would not maintain the interests of investors, after the deadly disease can be resolved.We must transfer an effective system of securities market. Delisting of the company making the plates in different conditions to convert the delisting of listed companies after eliminating the worries of not come back. Establish different market segments of the laws and regulations, improve the different sections of the external environment, so that different sections can be fair and just environment of continuous development.