Research On Application Of Debt Restructuring Standard

On February15.2006, the ministry of finance issued enterprise accounting standard, itcontains one basic accounting standard and thirty-eight specific accounting standards. The newaccounting standards come true substantive convergence with the international financial reportingstandards, which is the milestone in the history of China’s accounting. the new enterpriseaccounting standards which changed much compared with the former accounting standards.Among these accounting standards, debt restructuring standard’s change is bigger.Debt restructuring standard which was issued since1998, had gone through the2001and2006two major revision. This revision of debt restructuring standard is the process ofbalance of relation and the reliability of accounting information quality features. In theprocess of actual execution of debt restructuring standard issued by the1998and2001,there were serious phenomenon of earnings management. In the backdground of theinternational convergence of accounting standards, debt restructuring standard modify again in2006. It provides use fair value and debt restructuring gains and losses as the currentprofits and losses, but it still meet many problems in the actual execution.Through the introduction of the change process of debt restructuring standards and withthe aid of game theory and accounting rent-seeking theory, this article points out theproblems of the current debt restructuring standard in the implementation process: There aredifficulty to define financial difficulty; there is still difficult to accurate measurement of Fairvalue; it increase tax burden; Many enterprises, especially ST companies, still use debtrestructuring to carry out earnings management. Debt restructuring as a "lifeline" of anenterprise is to protect the shell of market. This article analyzes the causes of these problems,such as flaw of debt restructuring standards; imperfect of market system; government regulationis lax. Finally, this paper aimed at putting forward some Suggestions to solve these problems andfurther improve the debt restructuring standard.