Case Study On Accounting Estimate Change Of Hebei Iron And Steel

Accounting estimate refers to the company's uncertainties in the results of transactions or matters based on the information available on the basis of the judge.The measurement and change of accounting estimate are very subjective,and due to the users who use external information of the company's information asymmetry,it cannot evaluate the rationality of the accounting estimate made by the companies.Therefore,accounting estimate change has gradually become the means for earnings management of listed companies in China.After the global financial crisis in 2008,the iron and steel industries are influenced by the economic cycle downward,excess capacity,increased market competition and other factors,business efficiency generally decline.Many steel companies change the depreciation period of fixed assets of the company's financial position and operating results have a significant impact.On March 14,2014 Hebei Iron and Steel announced that in order to more objectively reflect the company's financial information,the company has decided to adjust the depreciation period of fixed assets from January 1,2014.The adjustment reduced depreciation of fixed assets of 2 billion yuan,owner's equity and net profit increased by 1.5 billion of Hebei Iron and Steel.This is the third change in nine years,respectively to extend,shorten and extend the depreciation of fixed assets in 2009,2011 and 2014.The thesis analyze three changes in accounting estimate and summarize the enlightenment and suggestion on investor and other aspects.It is helpful to better identify accounting information,and strengthen supervision.The thesis uses the method of combining the theoretical analysis with case analysis.The theory analysis introduces the concept and influencing factors of accounting estimation change,the theoretical basis of accounting estimate and accounting of fixed assets.First of all,the case analysis briefly introduces the background of the steel industry,the historical evolution,business scope,financial status and operating results,specific introduces the fixed assets and the depreciation of fixed assets of Hebei Iron and Steel,the changes in accounting estimate for 2009,2011 and 2014 are described separately.Second,from the economic cycle and cyclical analysis of the steel industry,respectively,the case analyze three accounting estimate changes in the motives,rationality evaluation of accounting estimate changes,market reaction,stock price movements and major financial index of the accounting estimate changes of the Hebei Iron and Steel.It can be found by analyzing the thesis: the entire business cycle and cyclical nature of the steel industry led to decline in the company's performance,through the means of adjusting the accounting estimate changes,to adjust the company's profits,to carry out earnings management behavior,and to make the company profitability,such frequent changes to the depreciation period of fixed assets is not reasonable.Finally,the thesis combine the inspirations that can be reference for all parties provided by the case analysis,as for the management of the listed company,the inspirations of improving the disclosure of the accounting estimates of the listed company and enhancing the professional ethics and professional judgment ability of the accountants can be provided,as for the investors,the inspirations of adequately identifying the financial impact of accounting estimates information and making the right decisions can be provided,as for the regulatory authorities,the inspirations of increasing the punishment of regulatory authorities and improving the quality of audit supervision can be provided.