Research On The Discontinuing Operations Reporting Status Of Listed Companies And The Response Of Capital Market

On April 28,2017,the Ministry of Finance issued Accounting Standards for Enterprises No.42-Holding Non-Current Assets for Sale,Disposal Group and Termination of Business,which regulates the termination of business operations in recognition,measurement and presentation.This standard requires enterprises to report the net profit of continuing operation and the net profit of terminating operation separately in the profit statement.This is the first formal institutional norm put forward by our country at the standard level for terminating operation.It has an important impact on the presentation of financial statements and the quality of accounting information.Previously,our country did not standardize the financial statement presentation of business termination,but in practice,business termination is very complex.Stakeholders demand for accounting information related to business termination is also increasing,and there is an urgent need for guidelines.In academia,the current research on termination of business is mostly theoretical discussion,and the research on enterprise practice level is less.The research on the implementation of Guideline 42 and the capital market reaction to termination of business is seldom involved.This paper,taking Shanghai a-share listed companies in 2017 annual report as the analysis object,first of all,on the principles of enterprise executive 42 situation has carried on the investigation and analysis,presentation and disclosure about the termination of the business of the enterprise condition was studied,the results found that the listed company to terminate the business presentation and disclosure has not fully meet the requirements of rule of 42,termination of business disclosure quality is still not high.Secondly,this paper takes the listed company "Hunan Hailey" as the analysis object,analyzes from the aspects of confirmation time point,measurement method,notes disclosure and so on,and finds that the company has problems in notes disclosure and so on.Finally,this paper adopts the event study method to study the capital market reaction of the case enterprise "Hunan Hailey" after the release of the termination event.The research results show that the release of the enterprise’s termination information has produced significant negative market effect in a short time.Terminate the business in this paper,enriched the related research in the field of literature,the rule of 42 after the release of the implementation of the listed company provides preliminary evidence to support,according to the rules of the enterprise improve the presentation and disclosure about the termination of business,provides the high quality accounting information provides the inspiration,the information demanders decisions can also have certain inspiration and reference.