Study On The Economic Consequences Of The Application Of New Income Principle In Telecom Industry

The revised version of Accounting Standards for Enterprises No.14-Income has been implemented since January 1,2018.What changes will be made in the accounting of telecommunications enterprises through the implementation of the new revenue standards? What are the economic consequences of these changes for Telecom companies? What measures should enterprises take to deal with it? These problems are worth studying.In this paper,case study method is applied to the case study of China United Network Communications Co.,Ltd.(hereinafter referred to as "China Unicom").Based on the detailed introduction of China Unicom's implementation of the new revenue standards,this paper analyses the impact of the changes in the standards on the quality of China Unicom's financial reporting and its impact on market value,as well as the countermeasures taken by China Unicom.The paper holds that the new revenue standards can improve both the quality of China Unicom's financial report information and the quality of financial report disclosure,which are embodied in enhancing the comparability and reliability of accounting information,specifying the disclosure requirements and defining the disclosure objectives,and making the enterprise value evaluation under the new revenue standards more realistic because of its conformity with the economic substantive business processing provisions.By calculating economic added value(EVA),it is found that the value of China Unicom's enterprises under the new revenue criterion will be slightly higher than that under the original criterion.Faced with the implementation of the new revenue criterion,China Unicom may take a series of measures from product design,transaction structure and other aspects to avoid the negative impact of the new revenue criterion and carry out earnings management.Finally,this paper will focus on some problems arising from the implementation of the new revenue criteria,and give some advices on the revenue principal in telecommunications enterprises.