Research On The Impact Of New Financial Instruments Standards On Financial Assets Impairment Of City Commercial Banks

China’s capital market has been steadily growing in recent years.In order to prevent financial risks,maintain stable economic operation and keep in line with international standards,the Ministry of Finance revised the original standards on financial instruments,and the new standards were implemented among listed banks in 2018.This revision has affected most financial institutions.As financial assets account for a large proportion of commercial banks’ assets,it is most obviously affected,which is embodied in the classification and impairment of financial assets.The change of the content of the standard is related to the fluctuation of the profit statements of commercial banks,so how to use the new standard reasonably to estimate the asset impairment and avoid credit risk is particularly important.This paper examines the main changes in the new financial instrument criterion,focusing on signal asymmetry theory,principal-agent theory,after explaining the background of the New Financial Instruments Standards and its impact on the banking industry.It also examines a number of domestic publicly traded commercial banks,distinguishes the distinctions between the old and the new standards,and sums up the impact of the new standards’ application on all aspects of the banking business.Bank A is selected as the specific case object to sort out the reclassification and impairment of financial instruments,as well as analyze the impact of changes in net interest margin and other indicators on Bank A’s financial statement data,in order to more accurately reflect the impact of the new standards on urban commercial banks.Finally,the report offers recommendations for addressing the issues posed by the new norms and promoting the financial market’s healthy development.The results show that : ECL model is more active in the provision of credit losses,and improves the quality of financial reports and the ability to resist risks.In practical application,the ECL model still leaves room for banks to manipulate profits,and banks can adjust the impairment provisions of financial assets subjectively.We should consider improving the disclosure of relevant information,and increase the description of concepts,parameters,assumptions and estimation techniques of critical points such as significant growth of credit risk and credit impairment in commercial banks.For the use of forward-looking information,government regulators also need to gradually develop more perfect normative documents.The innovation of this paper lies in the comparative study of the old and new financial asset impairment models,and the discussion of the similarities and differences between them,as well as the changes brought by Bank A in the aspect of financial asset impairment.The influence of each information quality index is analyzed by combining the changes of new standards with the quality of financial reports.