Research On The Impact Of Revenue Guidelines On The Performance Of Telecommunications Industry

On July 5,2017,the Ministry of Finance officially issued the " Accounting Standards for Enterprises No.14-Revenues"(referred to the new revenues standard or new standard in the following article).Enterprises listed at the same time both domestically and abroad,as well as and enterprises that are listed overseas and used international financial reporting standards or corporate accounting standards to prepare financial statements,will be effective on January 1,2018.The new revenue standard maintains the convergence with IFRS 15 “Revenue from Contracts with Customers”.The new standard no longer distinguishes between sales of goods,provision of services,transfer of asset use rights and construction contracts,and unified revenue recognition.The core principle of the model and clear revenue recognition is that “the company should perform the performance obligations in the contract,that is,when the customer obtains control over the relevant goods or services,it shall recognize the revenue.”The issuance of new standards will affect many industries.Among them,the telecommunications industry is one of the industries that are greatly affected by it.What new requirements are put forward by the new standards for related businesses for the telecommunications industry? Are there any changes in revenue recognition and measurement for some special businesses? How will these changes affect the company’s performance? These issues need us to study.This article mainly uses the literature analysis method and the case analysis method to study what changes will happen to the telecommunications industry if it implements the new revenue criteria.How will these changes affect its performance? First of all,from the aspects of revenue recognition,measurement,contract costs,special transaction issues,etc.,a systematic analysis of the differences between the old and new standards was conducted.Secondly,the telecommunications industry was analyzed and the business affected by the new standards was significantly affected-bundling sales,bonus rewards and channel agency services.Comparing and analyzing the results of the implementation of the three old and new standards,it is concluded that the new criteria not only affects the timing of revenue recognition,but also affects the amount of revenue recognition,resulting in a decline in the proportion of communications service revenue and an increase in the proportion of terminal sales revenue.The timing of revenue recognition will prevail over the current standards and will have a corresponding impact on the company’s performance.The study found that the implementation of the new standard can effectively improve the quality of accounting information in the telecommunications industry,reflect more realistic corporate performance,and enhance the horizontal comparability of accounting information in the telecom industry.The article also proposes recommendations for the application of the new guidelines: For case enterprises,the current business and contracts need to be sorted out and split,and the business structure adjusted in order to adapt to the impact of the changes brought about by changes in the standards.In response to the telecommunications industry,we have trained a team of experts for the study of standards and have proposed new solutions to changes in policy from the perspectives of law,finance,and taxation.For the Ministry of Finance,it is necessary to strengthen the supervision of standardized and rationalized enterprises in various industries so as to ensure that the implementation of the new standards requires continuous improvement of the guidelines in accordance with the actual conditions of the implementation of the new standards.