Deferred Tax Assets: Assets Or Risks

In recent years, with the change of Chinese market conditions and policies, as well as the enterprise product backlog phenomenon appears ceaselessly, make the accounting method of accounting and tax law differences, resulting in a large number of temporary differences, which will seriously affect the listing Corporation’s income tax. Since 2007 Chinese implement the new income tax accounting standards, began to adopt debt method of balance sheet to account the income tax, although it has improved after the implementation of new accounting standards, the loopholes and shortcomings still exist, Chinese income tax accounting standards made no explicit restrictions on the confirmation of deferred income tax assets, only requires enterprise when they confirm the deferred income tax assets, they should consider the possibility of future taxable income for the period. This will mainly depend on the subjective judgment of the enterprise management, and provides an opportunity for the enterprise to manipulate profit. Then the new accounting standards for business enterprises implemented since 2007, how about the situation of tax deferred assets of listing Corporation? Whether exists the motive of using deferred income tax assets to manipulate the profit? How the enterprise make use of the deferred income tax assets to manipulate profit? Is the main content of this paper.This paper adopts the method of case study, taking Shandong Haihua Limited by Share Ltd as the research object, through the research of the financial statements in 2008-2013 years, to explore whether there is a problem of the company’s deferred income tax assets, and the affect on company’s results of operations and financial indicators. The final draw is:although the deferred income tax assets is as an asset reported in the financial statements, it is likely to be a means of earnings management of the enterprise, and become a kind of venture for enterprises and the users of financial statements. Therefore, when confirm the deferred tax assets, we should improve the reliability and authenticity of accounting information through improving the accounting laws and regulations、improving audit standards and strengthening the occupation ability of financial personnel.