Empirical Study on the Influence of the Impaired Asset Policy on the Quality.docx

1、Empirical Study on the Influence of the Impaired Asset Policy on the QualityEmpirical Study on the Influence of the Impaired Asset Policy on the Qualityof the Information Disclosure: Based on the Listing Corporations in DifferentIndustriesTUDE DEMPIRIQUE SUR LINFLUENCE DE LA POLITIQUE SUR LES ACTIFS

2、 DEPRECIES DELA QUALITE DE LA DIVULGATION DES INFORMATIONS: BASE SUR LES SOCIETES LISTE DANSDIFFERENTES INDUSTRIES1Asia-Australia Business College in Liaoning University, Liaoning,Gansu Province, 110136, China*Corresponding author.Associate professor, mainly engaged in Financial Accounting Theory.Ad

3、dress: Asia-Australia Business College in Liaoning University,Liaoning, Gansu Province, 110136, ChinaEmail: wchy6310Received 20 June 2011; accepted 27 July 2011AbstractProvision for impairment of assets plays a veryimportant role in improving the quality of accountinginformation. In this paper, we u

4、se empirical researchmethod to analyze the application of asset impairmentand its impact on accounting information disclosure oflisted companies among the 12 industries by elaboratingrelative theories on asset impairment and analyzing datacollected from RESSET database. All these are to studythe dis

5、tinctiveness of listed companies from differentindustries in choosing impairment policies and the policiesimpact on industries, thereby providing some adviceaccording to different industries characteristics in makingpreparation of asset impairment.Key words: Impaired assets; Industry variance;Qualit

6、y of accounting informationRsumLa Provision pour dprciation dactifs joue un rletrs important dans lamlioration de la qualit desinformations comptables. Dans ce papier, nous utilisonsla mthode de recherche empirique pour analyserlapplication de la dprciation dactifs et son impact surla divulgation di

7、nformations comptables des socitscotes parmi les 12 industries en laborant des thoriesrelatives la dprciation des actifs et lanalyse desdonnes recueillies partir de bases de donnes RESSET.Tout cela est dtudier le caractre distinctif des socitscotes partir de diffrentes industries dans le choix despo

8、litiques de dprciation et de limpact des politiques surles industries, offrant ainsi quelques conseils en fonctionde caractristiques diffrentes industries dans la prise deprparation de la dprciation des actifs.Mots cls: Les actifs dprcis; La variance delindustrie; La qualit de linformation comptable

9、WU Changyu, & FENG Li (2011). Empirical Study on the Influence ofthe Impaired Asset Policy on the Quality of the Information Disclosure:Based on the Listing Corporations in Different Industries. CanadianSocial Science, 7 (4), 109-113. Available from: URL: http:/ www.DOI: 10.3968/j.css.19236697201107

10、04.Z365INTRODUCTIONIt has been ten years since the formal implementationof impaired assets policy in China, hence at presentthe formulation and the implementation of impairedassets policy is in the essential stage. However thedistinctiveness has not been reflected in the accountingstandards-impaired

11、 asset policy. The problem raised inthis essay is how different influence of the impaired asseton the quality of accounting information based on thespecialty of the operation and asset structure.This essay states the theories of impaired assetsprovisions and analyzes statistically on the application

12、 ofimpaired assets provisions in different industries throughthe method of empirical analysis. It also studies thesimilarities and differences of impaired assets provisionsin different industries according to the data and discussesthe distinctiveness of the selection and application ofimpaired asset

13、s in the listing corporations in differentindustries.1 . GENERAL ANALYSIS ON THEINFLUENCE OF IMPAIRED ASSETSPOLICY ON THE CORPORATIONS INDIFFERENT INDUSTRIES1.1 Features of Assets Distribution of ListingCorporations in Different Industries in ChinaAccording to the data, the proportion of liquid asse

14、ts andnon-asset distribution is basically stable. From the liquidasset distribution, the percentage of liquid assets in thereal estate industry is the largest which is above 85%, so itis expected that in the real estate industry it is more likelyto withdraw the more liquid impaired assets provisions

15、.Followed are information technology industry, productionand supply of electric, gas and water industry, whosepercentage of liquid assets is more than 60%. But in socialservices industry, wholesale and retail industry, miningindustry, the percentage of liquid assets is relatively smalland the relati

16、vely larger part is non-liquid assets.From the situation of non-liquid asset distribution,industries that the highest percentage of non-liquid assetsin all assets lie in wholesale and retail industry andsocial service industry. In addition the industries whosepercentage of non-liquid assets is more

17、than 50% arein mining industry, transporting industry, warehousingindustry and broadcasting and culture industry whilein other industries, liquid assets dominants in the assetdistributionTable1Asset Distribution in Listing CorporationsIn 2007 In 2008Industry Code liquid assets Non-liquid assets liqu

18、id assets Non-liquid assetsPercentage Percentage Percentage Percentagecomposite industry 1 53.04 46.96 48.19 51.81social services industry 2 25.54 74.46 26.12 73.88broadcasting and culture industry 3 47.66 52.34 48.34 51.66real estate industry 4 86.43 13.57 87.25 12.75wholesale and retail industry 6

19、 18.56 81.44 16.43 83.58transporting industry, warehousing industry 7 41.33 58.67 41.24 58.76production and supplyof electric, gas and water industry 8 64.62 35.38 75.70 24.30information technology industry 9 66.78 33.22 72.06 27.94constructing industry 10 55.99 44.01 59.47 40.53manufacturing indust

20、ry 11 51.27 48.73 48.65 51.35mining industry 12 39.30 60.70 39.10 60.90agricultureforestryanimal husbandryfishery industry 13 48.95 51.05 31.39 68.61total 44.78 55.22 43.84 56.161.2 Analysis of Industrial Factors that CouldInfluence the Application of Impaired AssetsStandardsFrom the above analysis

21、of asset distribution, forthe industries that have a higher non-liquid assetspercentage, such as wholesale and retail industry, socialservice industry, mining industry, transporting industry,warehousing industry and broadcasting and cultureindustry, etc, because the length of time it takes tooperati

22、on of non-liquid assets such as fixed assets andintangible assets is long and the time taken for renewalis slow, the policy of depreciation in different enterprisesvaries and the influence of technological changes and thepotential asset utilization on the market demand causethe possibility of impair

23、ment of assets is large and theinfluence of impaired assets provision on the profit isoutstanding compared to other industries.For the industry who has a higher percentage of liquidassets such as real estate industry, information technologyindustry, production and supply of electric, gas and waterin

24、dustry, their asset structure is mainly cash, inventoryand receivables whereas percentage of non-liquid assetsis lower. Thus the influence of non-liquid impairedassets provision on the enterprises is relatively small andrelatively speaking, the percentage of liquid impairedassets provision is higher

25、 and the space of bad debts andinventory depreciation provision is larger.While to the enterprises in social services industry andbroadcasting and culture industry, their asset structureis mainly cash and receivables, the space of bed debtsprovision is larger and at the same time the percentageof fi

26、xed asset and inventory is lower. So the influence ofinventory depreciation provision and fixed impaired assetsprovision on the profit in travelling industry is relativelysmall and it is not necessary to withdraw impaired assetprovision. Thus the percentage of liquid impaired assetsprovision should

27、be higher.With respect to enterprises in constructing industry,mining industry and information technology industry, dueto the proportion of its inventory is large, the percentageof value in the asset is higher and the inventory turnoveris longer which make the risk of controlling accountingprofit in

28、crease through the depreciation of inventory forthese types of enterprises compared with others.As for enterprises in wholesale and retail industry andagricultureforestryanimal husbandryfishery industry,although the percentage of liquid assets is higher, theturnover of liquid assets is faster, the r

29、isk is relatively lowdue to the accumulation of liquid asset such as inventoryand thus the proportion of provision of impairment shouldbe small.2. EMPIRICAL ANALYSIS ON THEINFLUENCE OF IMPAIRED ASSETSPOLICY ON CORPORATIONS I NDIFFERENT INDUSTRIES2.1 Material Source, Data Acquisition, SampleSelection

30、 and Analysis MethodThe data source is from RESSET database and theselection of sample is from relevant accountinginformation of listing corporations in Shenzhen andShanghai stock markets.Because different enterprises apply for differentprimary taxation rate owing to the difference in thetaxation po

31、licy cause the difficulty in dealing with thedata, this essay adopt total profit to analyze in order toavoid tax rate and obtain more precise conclusion.Criteria of sample selection:(l) Due to the specialaccounting method in financial and insurance industry,eliminate listing corporations in financial and insuranceindustry; (2) eliminate listing corporations whose impairedasset provision was 0 in the year 2007 and 2008; (3)eliminate listing corporations which have