| As the emerging of double entry bookkeeping, surplus became one of the important concepts of finance report. It is considered as the index of measuring corporate performance and aroused considerable attention from investing group, creditors and stakeholders. With the publishing of current enterprise accounting principle, the composition of income data turned out to be more complicated. Net profit not only contains persistent recurrent profit and loss but also possesses an increasing portion of non-recurring profit and loss with short persistency. In general, the projects with short persistency can only reflect risks that one enterprise met recently but influence little on analyzing corporate profit quality and valuing corporate value by accounting information user. Moreover, projects with short persistency are more controllable in a short period and become a significant method of enterprise in managing surplus. Although, since1999, China’s Ministry of Finance and securities regulatory commission (CSRC) successively announces a serial of criteria of extraordinary items, a lot of hideous phenomena exist, such as casually disclosing extraordinary items projects by enterprises, disclosing contents are out of criteria, or warned public companies will avoid the risk of suspending going public or even being delisted by using extraordinary items to adjust profits. So, by analyzing the disclosing of extraordinary items issues of public company, investors can understand non-recurring profit and loss as an index comprehensively and hold the sustained profitability of a public company. Thus, it is significant in making scientific and reasonable investment decisions by investors.In this paper, the author stated the concept and the disclosing criteria of extraordinary items firstly and analyzed the main differences by comparing China and foreign countries in extraordiary items. Then, by combining normative research, descriptive statistics, chart analysis and case study, the author compiled and analyzed the statistics of standard public corporations which listed on Shanghai a-share motherboard during the year2010to2012. The research results indicated that China’s public corporations possess many problems in disclosing non-recurring profit and loss. Such as casually disclosing extraordinary items projects by enterprises, disclosing contents are out of criteria, or warned public companies will avoid the risk of suspending going public or even being delisted by using extraordinary items to adjust profits. All these problems seriously injured the dependency, reliability and comparability of accounting information. Finally, concerning all the problems and China’s national conditions, the author put forward several comments in helping regulate the disclosure of extraordinary items and provide qualified finance report to financial statement users. |
