The Accounting Recognition And Measurement Analysis Of Preferred Stocks Based On China’s Financial Instrument Standards

In 2019,Premier Li Keqiang proposed in the "State Council Government Work Report" that the reform of the fiscal,taxation and financial system should be optimized to promote the healthy and stable development of the multi-level capital market.With the emergence of more and more financial composite instruments,preferred stocks are favored by the capital market for their unique advantages such as large amount of financing,small financial risks,small capital constraints,and non-decentralized control.Capital issues,as well as broadening financing channels,improving capital composition and many other benefits.However,due to the increasing diversification of the terms of preference shares,and the complexity and ambiguity of financial instrument standards,the existing literature mostly focuses on sorting out and judging the standards,and accounting for new financial instruments such as preference shares.There are few researches on the issues of recognition and measurement,but in practice,the accounting treatment of preferred stocks and the resulting impact and problems have attracted much attention.This article selects Mu Yuan Company as a case company,Mu Yuan Company as a listed company listed on the small and medium-sized board of the Shenzhen Stock Exchange,and as a private non-financial company that chooses to issue preferred shares to raise funds after listing.In recent years,many financial companies and state-owned enterprises that issue preferred shares China has a strong representation.After sorting out the financial instrument standards and discussing a series of theoretical foundations of the preferred stocks,the article analyzes and elaborates the impact of the issue of preferred stocks by Mu Yuan Company shares from the issue motive,the terms of issuance,the confirmation measurement,and the confirmation measurement of the preference shares.It was found that in practice,it is difficult to distinguish and measure the accounting attributes of preferred stocks,impure corporate issuance motives and inadequate accounting standards.At the same time,after analysis,it is concluded that although It is difficult for a company to distinguish between preferred stocks due to the dual characteristics of both equity and debt,it is reasonable for companies to design the terms of preference shares and pay attention to the economic substance of the terms of issuance.To satisfy the company’s own best interests,it is also necessary to avoid excessive manipulation of financial data’s issuance motive.For the formulation of financial instrument standards,more attention should be paid to the economic substance in the interest rate jump mechanism,etc.,and timely improvements should be made to avoid being exploited.It is hoped that the writing of this article can provide some reference for companies to issue preferred shares and deal with preferred shares,and provide some ideas for the improvement and reform of China’s future financial instrument standards.