[Keywords:] financial statements; New accounting standards; Change; Analysis; sound value
In 2006, the annual reports of listed companies in the transitional period between the old and new accounting standards attracted the attention of information users. With the disclosure of the interim financial report in the first quarter of 2007, the impact of the new standards began to appear, and some hot forecasts of the reported data will also be tested. In order to better understand and analyze the financial statements under the new standards, the author discusses them from the following aspects according to his own learning experience.
First, the analysis of the impact on the balance sheet.
(1) financial instruments
Short-term investment, long-term equity investment and long-term creditor's rights investment with reliable fair value originally accounted by the cost method are listed in the items of "tradable financial assets", "available-for-sale financial assets" and "held-to-maturity investment" respectively according to the management's intention. Under the item of current liabilities, the item of "transactional financial liabilities" is added. Except for "held-to-maturity investment" which is measured in amortized cost, the rest are measured at fair value, and changes in fair value may affect the current profit and loss or capital reserve.
(2) Long-term equity investment
The new accounting standard divides long-term equity investment into three categories: (1) the investing enterprise can control the long-term equity investment of the invested unit; (2) Long-term equity investment in which the investing enterprise does not have the same control or significant influence on the investee, has no quotation in the active market, and its fair value cannot be reliably measured; (3) Long-term equity investment in which the investing enterprise has the same control or significant influence on the investee. For the above-mentioned first and second types of long-term equity investments, the new accounting standards stipulate that the cost method shall be used for accounting, and for the above-mentioned third type of long-term equity investments, the new accounting standards stipulate that the equity method shall be used for accounting. Cancel the balance of equity investment in accounting, there is no amortization problem, which will have an impact on net profit.
(3) Investment real estate
Reportable investment real estate originally included in inventory, fixed assets and intangible assets will be listed separately in the balance sheet, which will affect the asset structure of enterprises, especially enterprises that include a large number of investment real estate in inventory. After the implementation of the new standards, the current assets of enterprises decrease and the current ratio decreases. When an enterprise implements the investment real estate standards for the first time, the retained earnings will be adjusted by the difference between the fair value and the original book value. When an enterprise converts its own real estate into investment real estate, the difference between its fair value and the original book value is included in the owner's equity. Both adjustment methods will increase the owner's rights and interests of the enterprise.
(4) Fixed assets
The main changes are as follows: the estimated scrap cost should be considered in the cost of fixed assets, and the cost of deferred fixed assets outside normal credit conditions is determined on the basis of the present value of purchase price, which will increase the value of fixed assets, increase depreciation and reduce profits.
(5) Intangible assets
Refers to identifiable intangible assets. Intangible assets involved in self-development can include the capitalized expenditure of the enterprise in the development stage (as long as the expenditure in the development stage meets the four conditions stipulated in the standards). "Cumulative amortization" has been added to reflect the amortization value of intangible assets separately. The accounting treatment of capitalization of R&D expenditure in the new standards is bound to better promote enterprises to invest in R&D projects, especially for scientific research listed companies, and relevant information is more helpful to analyze the core competitiveness and long-term growth ability of enterprises. Capitalizing some R&D expenditures can increase the assets of enterprises, and the financial situation of enterprises will also be improved to some extent, such as reducing the asset-liability ratio, improving commercial credit and helping enterprises expand financing channels. However, in terms of taxation, a temporary increase in profits will lead to a recent increase in income tax.
(6) Employee compensation items
The content includes eight aspects: salary, bonus, allowance, employee welfare, various social insurance expenses, housing accumulation fund, labor union funds and employee education funds, non-monetary benefits, dismissal compensation and other salary-related expenses. Except for dismissal compensation, other employees' salaries are included in assets, costs or current profits and losses respectively according to income objects. This will generally reduce the gross profit margin and gross profit amount of enterprises in each period, and will also have a certain degree of deferred impact on the profits and losses of enterprises in each period, which will have a greater impact on enterprises with longer production cycles. The proportion of welfare funds is not stipulated, but it is indeed charged.
(7) Income tax items
Using the balance sheet deferred method, the concept of temporary difference is introduced. The difference between the book value determined by accounting standards and the tax basis stipulated by tax law is recognized as deferred income tax assets or deferred income tax liabilities, and is listed separately in the table. Judging from the annual report disclosed at present, income tax is the most widely benefited item, and many companies have benefited from the deferred income tax system, the most prominent of which is Sichuan Changhong, whose shareholders' equity has increased by an astonishing 226,406,5438+0,000 yuan.
(8) Owner's equity items
1. Increase factors (mainly reflected in capital reserve projects). The factors leading to the increase of shareholders' equity of listed companies due to the implementation of the new standards mainly include: first, the financial assets measured at fair value and whose changes are included in the current profits and losses and available-for-sale financial assets lead to the increase of shareholders' equity, mainly referring to trading financial assets such as stocks, bonds and funds purchased by listed companies from exchanges; Second, due to the provision for impairment of assets, deferred income tax assets are formed, resulting in a net increase in shareholders' equity; Third, minority shareholders' equity is included in owners' equity. Previously, minority shareholders' rights and interests were listed before owners' rights and interests. The adjustment table of shareholders' equity disclosed in Jiangnan Gaoxin Annual Report 2006, the first annual report this year, shows that the company's shareholders' equity increased by 65,438+0,766,5438+0 in 2007 according to the new accounting standards, 750 yuan. Among them, the fair value accounting of the company's financial assets increased net assets by11.08 million yuan, the income tax accounting by the balance sheet debt method increased retained earnings by 488,500 yuan, and the minority shareholders' equity accounting increased shareholders' equity by 1.70 1.80 million yuan.
2. Reduce factors. The factors leading to the decrease of shareholders' equity of listed companies due to the implementation of the new standards mainly include two aspects: first, the net decrease of shareholders' equity caused by the resale of long-term equity investment difference; Second, the net decrease in shareholders' equity is caused by the liabilities arising from the confirmation of employee stock options and dismissal compensation.
(9) Cancelled projects
Due to the application of the balance sheet view, the items of prepaid expenses and accrued expenses are cancelled, and the relevant contents are accounted by cash basis. This will reduce the difference between the income statement data and the cash flow statement data.
Second, the impact on the analysis of income statement
(A) changes in the project and structure
The new income statement cancels the main business income, main business cost and other business income and expenditure items, but merges related contents, in which the operating income includes the main business income and other business income, the operating cost includes the main business cost and other business costs, and the business tax and surcharges include the original main business tax and surcharges and taxes and surcharges in other business expenses. The main business profit items were cancelled, and asset impairment loss, fair value change gain and loss, basic earnings per share and diluted earnings per share items were added.
(B) the impact on the analysis of operating profit
1. The content of asset impairment loss has changed. According to the requirements of the new accounting standards, listed companies are not allowed to make use of the asset impairment reserve to artificially adjust the profits of each period, or to turn back a lot after the huge amount was accrued in the previous period, and to adjust the profits at will, nor to change the way and proportion of accrual at will. Except for the impairment of assets such as inventories, receivables and available-for-sale equity instruments that can be recovered with conclusive evidence, the impairment of non-current assets such as fixed assets and intangible assets with a clear amortization period is not allowed to be reversed. Therefore, it will become history for listed companies to realize "one-time loss" through the above methods.
2. Uncertainty of gains and losses from changes in fair value. If the follow-up measurement of investment real estate adopts fair value model, the impact on profit is uncertain. But this model does not need depreciation and amortization, so it reduces the cost and has a positive impact on profits. According to the new accounting standards, all investment in traded securities must be valued according to the market price announced by the exchange at the end of the period, and its changes will be included in the profit and loss. Even if the shares held by a listed company are not transferred or sold, they should be measured at fair value, and the results should be recognized as current profits and losses. Judging from the annual report disclosed this year, the total investment income has increased rapidly year-on-year, and even the performance of some companies is completely supported by investment income. Among them, lucrative short-term investment is one of the main sources of investment income growth. In 2006, the stock market was booming, which greatly increased the return on stock investment measured by fair value of listed companies.
(c) Non-recurring profit and loss items remain the focus of attention.
Non-recurring profit and loss items should be paid special attention to when analyzing profit quality because of their unsustainability and operability. According to the statistics of china securities journal Data Center, as of March 6, 2007, among the listed companies that have published their 2006 annual reports and have comparable data, the proportion of non-recurring gains and losses in net profit in 2006 increased from 4.5% in 2005 to 10.4%. The status of non-recurring gains and losses in the performance of listed companies has rapidly increased. Under the new standards, debt restructuring and exchange of non-monetary assets may bring some non-recurring gains and losses. S*ST Sky expects a net profit of about 284 million yuan in the first quarter of this year and earnings per share of 4.67 yuan. The main reason is that the company's debt restructuring was completed in 2006, and the related creditors exempted the company's related debts from June 65438+ 10/day, 2007. According to the new accounting standards, the debt restructuring income of 27 1 10,000 yuan is included in the company's current profit and loss.
The possible new trend of related party transactions: major shareholders are more enthusiastic about injecting high-quality assets into listed companies (they can confirm the restructuring income, or exchange non-monetary assets for good and bad, and convey benefits to listed companies). These high-quality assets will not only improve the performance of listed companies, but also improve the valuation of listed companies. After the implementation of the new standards, listed companies may obtain high-value equity investment through low prices, thus achieving the purpose of manipulating profits.
Thirdly, further analyze the uncertain factors in the analysis of financial statements.
(A) the impact of fair value
At present, 30 of the 38 specific accounting standards issued in China involve the measurement of accounting elements, among which 17 uses the fair value measurement attribute to varying degrees, which is mainly reflected in financial instruments, asset impairment, enterprise merger, deferred income tax and so on.
After the implementation of the new standards, enterprises will recognize more and more holding gains and losses and non-recurring gains and losses, but these gains and losses often have no corresponding cash flow, resulting in a decline in the correlation between net profit and cash flow. Profit distribution must ensure the preservation of capital. After the introduction of fair pricing, the management must distinguish realized gains and losses from unrealized gains and losses and determine the basis of profit distribution.
Due to the harsh conditions of fair value application, its impact is temporarily limited, and its impact is gradually reflected. For example, the real estate enterprises' assets increased sharply due to the fair value measurement of investment assets, which was not as drastic as the market expected. Huaye Real Estate Annual Report, the first annual report of real estate enterprises in Shanghai and Shenzhen stock markets, shows that the company changed the accounting of investment real estate from fixed assets to investment real estate accounting according to the new standards, but did not choose fair value measurement, but adopted the cost model.
(B) the impact of exchange rate and interest rate factors
The introduction of fair value makes accounting more closely related to the complex capital market and macroeconomic environment. When the market exchange rate and interest rate change, the revalued value of assets or liabilities will change, thus affecting the financial situation and profitability of enterprises.
For some companies whose assets are mainly financial assets and investment real estate, the fluctuation of their net profit and net assets depends on the price fluctuation of the stock market and real estate market. In order to stabilize business performance, companies will inevitably use a large number of financial futures derivatives such as stock index futures and interest rate futures to manage risks, which will expand and enrich the content of hedge accounting.
In addition, there are many factors related to present value in the new standard, such as the estimated net salvage value of fixed assets, the estimated abandonment cost, deferred payment, and the determination of recoverable amount. The calculation of present value is inseparable from the estimation and application of interest rate.
Expand the scope of professional judgment
For example, the depreciation of fixed assets, the guidelines stipulate that enterprises should reasonably choose the depreciation method of fixed assets according to the nature and use of fixed assets, on the basis of reasonably determining the service life and estimated net salvage value, and combining with the expected realization method of economic benefits related to fixed assets. This requires the management to determine the depreciation period and estimated net salvage value according to the business strategy and actual situation.
In addition, professional judgments are more prominent, such as the provision for the abandonment cost of fixed assets, the classification of financial instruments, the provision for impairment, the determination of asset groups, the confirmation of intangible assets, the determination of service life, the amortization period, especially the cost and capitalization of self-developed intangible assets, and the commercial essence of non-monetary assets exchange.
(d) Tax impact analysis is more complicated.
A large number of fair values are applied in the measurement of assets and liabilities, which makes the difference between the book value determined by accounting standards and the tax basis stipulated by tax law more and more frequent. Under the balance sheet deferred method, the income tax impact of these differences will be recognized as deferred income tax assets or deferred income tax liabilities, and income tax expenses will be determined on this basis. If deferred income tax assets are involved, we should also consider the taxable income that is likely to be obtained in the future. Therefore, this makes the accounting and analysis of income tax accounting more complicated.
Four. counter-measure
(A) as soon as possible familiar with and understand the content of the new accounting standards and its impact
According to the provisions of the new accounting standards and their own business characteristics, listed companies will analyze and disclose in detail the changes in accounting policies and accounting estimates that may occur after the implementation of the new accounting standards and their impact on the company's financial position and operating results in the full text of the 2006 annual report "Management Discussion and Analysis-Prospects for the Company's Future Development". At the same time, in the "supplementary information" part of the full-text financial report of the 2006 annual report, the adjustment process of major differences in owners' equity (or shareholders' equity) between the end of 2006 and the beginning of 2007 and the audit opinions of accounting firms should be disclosed in tabular form. In the analysis of statements, users should reasonably evaluate the impact of the new standards according to their own knowledge and information disclosure of listed companies. Even for the revalued listed companies, the impact is often one-off, and the asset quality of listed companies is the guarantee to determine the "shareholder income". On the one hand, the valuation of listed companies is dynamic, even if the changes in relevant accounting policies have a positive impact on their current profits, they are often at the expense of stabilizing their profits in the next few years; On the other hand, changes in accounting policies will affect the accounting profits of listed companies, but will not affect the cash flow of enterprises. Therefore, the implementation of the new accounting standards will not substantially change the internal valuation of listed companies. However, the new value of some assets reflected by fair value may mislead investors, thus bringing investment decision-making risks.
In addition, in the analysis of statements, we should fully understand the contents of the notes of accounting statements and combine them with the data of statements in order to understand the statements more accurately.
(B) the application of financial ratio
1. Use some original financial ratios carefully. Such as P/E ratio and P/B ratio, earnings per share, etc. With the continuous rise of the stock market, even if the operation of listed companies has not changed, as long as there is cross-shareholding, the performance of listed companies will continue to rise with the rise of the stock market, thus supporting the further rise of the stock market. Therefore, there may be extreme situations in which the stock market rises and the P/E ratio and P/B ratio fall instead of rising.
2. Calculation of financial ratio. Due to some changes in the items and connotations of the statements, some original financial ratios may lose their functions or need to be reinterpreted, which need to be calculated in combination with relevant data such as notes, such as gross sales margin, net sales interest rate, asset turnover rate and cash ratio. Some new financial ratios should also be designed, such as asset impairment gain/loss/operating profit (or net profit), fair value change gain/loss/operating profit (or net profit), gains or losses directly included in capital reserve/net assets, etc.
3. Pay attention to the application of cash flow correlation ratio. After the implementation of the new accounting standards, the importance of net profit and net assets for statement analysis will decrease, while the importance of cash flow analysis will increase. In the analysis of statements, it is necessary to increase the analysis of cash flow, and analyze the quality of profits by comparing data such as net cash flow with profit indicators.
(C) to speed up the construction of enterprise information
Because the new standard requires higher information disclosure, such as detailed information on credit risk, interest rate risk, market risk and quantity of financial instruments, the enterprise risk management mode must be changed accordingly, and the ability to obtain market data is faster (such as the "mark-to-market" requirement for derivatives trading and bond investment products). For another example, the new standards require investors to use the equity method to account for joint ventures and associated enterprises, and use the detailed explanation method instead of the difference method to decompose the equity investment difference during the investment period into the increase and decrease of assets, liabilities and goodwill in detail, and adjust the book net profit of the invested unit based on the fair value when confirming the investment income. If the accounting policy of the investee is different from that of the investee, it must be adjusted when the equity method is used to confirm the investment income. Therefore, the enterprise must record and track the changes in the value of the assets and liabilities of the invested unit at any time, and coordinate both parties.
These objective changes require enterprises to strengthen information management, timely obtain fair value information of related assets and liabilities, financial information of related enterprises and information of relevant departments such as tax authorities, which will also promote the rapid development of enterprise information construction.
Main references
Huang Shizhong. Impact analysis of new accounting standards [J]. Accounting Newsletter: Comprehensive Edition, 2007, (1).
[2] Guo Jian, Wei Xiaolan. The Influence of New Accounting Standards on Financial Analysis [J]. Accounting Monthly: Comprehensive Edition, 2007, (3).
[3], Chen, Comparison and analysis of old and new accounting assets impairment standards [J]. China Chief Accountant, 2006, (5).
[4] Task Group on Accounting Standards for Business Enterprises. Interpretation of Accounting Standards for Enterprises in 2006 [M]. Dalian: Dongbei University of Finance and Economics Press, 2006. Posted in China Paper Download Center.