The Empirical Research On The Value Relevance Of Listed Companies’ Assets Impairment

On Feb15th,2006, China’s ministry of finance promulgated the revised enterprise accounting standard formally, which was implemented in the listed companies since1st, Jan,2007. Compared to the old standard, the new enterprise accounting standard achieved the international standards with the essence of convergence. In reference to international accounting standards, the new accounting standards about assets impairment revised the content of the original criterion combining with China’s actual conditions, and standardized some specific issues about the signs determination of assets impairment, assets impairment loss recognition and measurement, the impairment testing and processing of goodwill, the relevant information disclosure of assets impairment, introduced the concepts such as "Asset Group","Headquarters Assets" and so on, asked "If the long-term assets impairment loss is recognized, which shall not be reversed in subsequent accounting period", which made the information of assets impairment pay attention to the relevance and concern about the reliability at the same time. Therefore, the theorists and practitioners have focused on the criteria for assets impairment once again.In this case, the promulgation of accounting standards for assets impairment can correspond with the decision-usefulness view (Levitt,1998; Beaver,1998)? The paper summaries the results of previous studies, then analyzes the internal logic between the assets impairment and the market value on the background of the changes in our criteria for assets impairment. Based on this, the paper tests the value relevance of assets impairment using the improved Ohlson model:Firstly, the paper uses the improved Ohlson model to test whether the assets impairment information has incremental information content or not, then constructs a Z statistical value to compare the value relevance of assets impairment between the new accounting standards stage and the old accounting standards stage using the Vuong test, furthermore, the paper takes the assets impairment information into the long-term and short-term assets impairment information to compare that whether the value relevance of assets impairment information in the new accounting standards has added value relevance compared to the old accounting standards. The results show that:(1) the assets impairment information has added value-relevance out of the information of earnings;(2) The value-relevance of assets impairment information in the new accounting standards stage is higher than that in the old accounting standards stage. The new assets impairment standards ensure the reliability of the assets impairment information but not reduce its value relevance. At last, the paper proposes policy recommendations to improve the value relevance of assets impairment information and future research directions according to the research, expecting to contribute a modest effort to the theory and practice study of investment decision-making and standard-setting, etc.