Market Reaction Of Non-monetary Assets Exchange Profit And Loss

In recent years, non-monetary assets exchange gains and losses become one of the means for listed company to manage earnings and adjust profits. As the growing surplus of listed companies as well as the continuous development of China’s securities market, the research that about the market reaction has increasingly becoming side the focus of attention. February2006the Ministry of Finance introduced a new system of accounting standards and "Accounting Standards for Enterprises No.7-Non-monetary assets exchange, introduced the "commercial" substance and "fair value measurement", drawing on the international accounting standards. The implementation of the guidelines provides a new means for listed companies to manage earnings. In this context, the writher put the theory of earnings management and non-monetary assets exchange gains and losses as a starting point, then analysis the motives and means for listed companies to use non-monetary assets exchange gains managing earnings. Then sample the listed companies in shanghai and Shenzhen stock exchanges that have non-monetary assets exchange gains and losses occurred in2008-2010.Through the empirical research, on the basis of market effective put forward the hypothesis, building models, using SPSS statistical variables, through descriptive statistics and linear regression analysis. The results show that: the unexpected surplus is relevant to the Cumulative abnormal returnand and the earnings response coefficient of the non-monetary assets exchange gain and loss is lower than the earnings response coefficient of the recurring gains. That show that the listed companies’ earnings have information, and market can give a higher return to recurring profit and loss than the non-monetary assets exchange gains and losses. At the same time the writher found that although the market is able to identify the surplus of information but the extent is relative weak. For this, we give the proposal. We also hope that this study will help the people understand the characteristics of the Chinese stock market behavior more profound.