Research On Accounting Treatment And Financial Impact Of Perpetual Bond Of Zhongtai Chemical Co.,Ltd

Perpetual bonds are a new thing in China’s capital market.China’s listed companies have only started to issue perpetual bond financing in recent years.Perpetual bonds appeared in China’s capital market for the first time in 2013.Perpetual bonds entered the exercise period in 2018,and issuers faced the issue of whether to redeem perpetual bonds.When perpetual bonds are classified as equity instruments,they have the advantages of increasing the company’s equity without diluting shares,while reducing the asset-liability ratio.This is very attractive for listed companies that urgently need financing to supplement liquidity and have debt issuance restrictions due to excessive asset-liability ratios.However,the renewal cost of perpetual bonds is high,and the actual duration is not necessarily "permanent." At the same time,there may be problems that cover up the company’s true debt scale and generate default risks.Therefore,it is particularly urgent to carry out relevant research on the accounting treatment of the issuance of perpetual bonds of China’s listed companies and the impact on the company’s financial affairs.This article selects the case of perpetual bond of Xinjiang Zhongtai Chemical Co.,Ltd.as the research object,and conducts in-depth research on the accounting treatment and financial impact of listed company perpetual bond financing.The research framework of this article: Part I Introduction.Introduces the research background and significance,relevant theories and literature,etc.;Part 2 Introduction and motivation analysis of the case of perpetual bond of Xinjiang Zhongtai Chemical Co.,Ltd.Introduced the general situation of the issuance of Zhongtai Chemical’s perpetual bonds,and analyzed the reasons for the action;the third part is the analysis of the impact of the accounting treatment of the perpetual bonds of Zhongtai Chemical.Analyze the accounting standards related to perpetual bonds and discuss the financial impact of Zhongtai Chemical’s perpetual bond issuance terms;Part IV: Analysis of the financing cost of Zhongtai Chemical’s perpetual bonds.The financing cost of Zhongtai Chemical’s perpetual bonds was analyzed from the aspects of issuance cost and redemption cost;the fifth part is the financial impact analysis of the issuance of Zhongtai Chemical’s perpetual bonds.Research on the financial impact of perpetual bond issuance on the company’s solvency,profitability,and comprehensive performance;the sixth part of the research conclusions and recommendations.Through analysis,the following research results are obtained:(1)The financing cost of Zhongtai Chemical’s perpetual bonds is reasonable;(2)The accounting treatment of Zhongtai Chemical’s perpetual bonds is appropriate,which has a certain impact on the company’s financial;(3)The issuance of perpetual bonds has a positive impact on the company’s finances;(4)The redemption of Zhongtai Chemical’s perpetual bonds has a good market response.