The Influence Of New Income Standards On Financial Accounting Of Real Estate Enterprises

In May 2014,IASB and FASB jointly issued the International Accounting Standards No.15-Customer Contract Income and Topic 606-Income from Customer Contracts to solve many problems in the application of the old income standards.It is a milestone in the development of international income standards.Then,on the basis of repeated discussions and research,the Accounting Department of the Ministry of Finance of China drafted a draft for the income standards at the end of 2015.In July 2017,the “CAS No.14-Income” was officially released.This revision and improvement has had a profound impact on China’s accounting theory and practice,because the new income standards can not only solve the specific problems existing in China’s old standards,but also further realize the international convergence of China’s standards.The real estate industry has an important strategic position and plays a guiding role in many other industries in the national economy,with huge profitability.The main source of corporate profits is income.In order to reflect its profitability,improve its accounting information quality,accurate and efficient manner,it must regulate the accounting treatment of real estate enterprises in income recognition,measurement,recording and reporting.Before the implementation of the new income standards,China’s real estate enterprises mainly use the “risk compensation model” and the“completion confirmation method” to confirm the income,resulting in a very concentrated recognition of income and obvious fluctuation.With the constant innovation of the real estate industry business model,the old income standard can no longer meet the accounting requirements of the new business model of the real estate industry,facing new challenges.The new income standard replaces the “risk compensation model” with the“control model” to clarify the income recognition criteria,the unified income recognition model,and enhance the quality of financial information.This paper is based on the real estate industry,the first part introduces the theoretical background of the birth of new income standards and research status at home and abroad,thus clear the direction and framework of research.Secondly,from the income criterion,the definition and content of the income standards are introduced,and then the five aspects of the concept,scope,condition,processing and disclosure of the new income standards are introduced.At the same time,the theoretical basis for formulating theincome standards is briefly introduced.In order to lay the theoretical foundation for the later research.Then analyze the reasons and significance of the changes in the new income standards.In the case analysis section,through the introduction of the real estate industry background and case companies,from the four aspects of income recognition,measurement,recording and reporting,analyze the impact of Country Garden’s early application of the new income standards(HKFRS15).When an enterprise recognizes income for a part of its business for a period of time,it should notice the contract with the customer and its legal environment.Then,based on the“five-step method” of the new income standards,the problem of paying attention to the application of the new income standards for real estate enterprises is to pay attention to the identification of contract and its performance obligations,pay attention to determine the transaction price and how to assign it to responsibility for performance and recognition of income when the performance obligation is completed;at the same time,the implementation of new income standards for real estate enterprises in terms of the professional level of financial personnel,contract management,corporate accounting procedures and immediate feedback on the application of new income standards relevant suggestions.Finally,the conclusions and research deficiencies of this paper are summarized in the concluding remarks,and the direction of future research is clarified.By comparing and analyzing the application of new and old income standards and the application and impact of new income standards,this paper believes that the old income standards doesn’t have irregularities,and can’t guide the real estate enterprise’s income confirmation treatment.The implementation of the new income standards is imperative.New income standards have a big impact on real estate companies.Therefore,studying the application process and its impact of new income standards on real estate companies is significant.It’s expected that the research in this paper can help real estate companies that have not adopted the new income standards to understand the new income standards in advance,and prepare for the implementation of the new income standards from the recommendations of this paper,so that the income processing of enterprises can be more standardized when implementing the new income standards.Efficient and effective to avoid the occurrence of confirmation in inappropriate time.