Sound Accounting Policies Of State Owned Commercial Banks

First, the emergence and development of robust accounting policies. (1) prudent accounting policy, that is, in accounting, we should adhere to the prudence principle (also known as prudence principle and conservatism). It means that when accounting for uncertainties, we should maintain prudent accounting judgment, do not raise assets or profits, nor depress liabilities or expenses, and reasonably estimate possible losses and expenses.

(two) the origin of prudent accounting principles can follow the strategy adopted by medieval property trustees to release their Accountability.

This reduction of responsibility is gradually recognized by the subsequent accounting profession.

American Accounting scientist Sheffield noted that in the late nineteenth Century, some auditors in England were often sued by investors after their bankruptcy. Most of the lawsuits were caused by auditors' unqualified opinions on financial reports overestimating assets and earnings.

For similar reasons, the accounting profession in the United States began to discuss conservatism in the early part of last century.

But the general concern for the prudence principle is that after the great crisis of 30s, people realized that the flood of accounting reports that boasting profits and whitewashing prospects before the great crisis had led to the "blind optimism" of all aspects of the economy, which was a major cause of the great crisis.

Three, we can draw the conclusion that the prudence principle is the common value orientation of managers, auditors, investors and accountants.

Although there are still differences in specific applications, it has been widely accepted and applied.

The principles of prudence in accounting standards of the United States, Britain, Canada and Australia are all reflected.

In France and Germany, the capital of enterprises is mainly provided by credit institutions such as banks, and more emphasis is placed on the application of the principle of stability.

It is worth noting that the international accounting standards board (IASC), in the IAS NO.11975 first, refers to the principle of conservatism as the three element of choosing accounting policies (conservatism, substance over form and importance), which further demonstrates that the robust accounting principles have been recognized by the accounting circles in various countries earlier in the process of establishing international accounting standards.

Two, it is necessary for enterprises to use prudent accounting policies. (1) prudence principle is an inevitable choice for accounting to adapt to the uncertain factors of market economy.

Under the condition of market economy, competition plays an important role in regulating the economy. There is a great deal of uncertainty in the business activities of enterprises.

Accounting must reflect and supervise the production and operation activities of enterprises. When designing its operation rules and methods, it must consider the uncertain factors faced by enterprises, and reflect the impact of uncertain factors in economic activities on enterprises.

Therefore, in the modern economic society, as long as there is market competition, as long as there is expectation for the future, enterprises will not be able to avoid uncertainties. As long as there are uncertainties, the prudence principle should be reflected in accounting treatment.

(two) the prudent accounting principle is established, which is closely related to the accounting period hypothesis.

Accounting period is an important assumption of accounting, but it has great uncertainty in itself.

It is impossible for an enterprise to answer the question of how many accounting periods in its entire life span.

In a specific accounting period, enterprises often have many pactions not yet completed or failed to achieve their final results.

In accordance with the requirements of accrual basis, accountants must reflect their actual effects in time, so they have to adopt the estimation method to a certain extent.

Estimates are not strictly measured, and there will inevitably be high or low.

Therefore, when it comes to the choice of accounting methods, we should properly consider the requirements of prudence and adopt a more promising way to reduce losses and costs in the future, so as to reduce the impact of future uncertainties.

(three) implementing prudent accounting principles is an inevitable requirement for enterprises to guard against operational risks, maintain sound operational risks and maintain sound operation.

Enterprise operation has the principle of conservatism in risk implementation. "Do not underestimate losses and expenses". Reasonable estimation of assets losses and expenses that may occur and advance accounts are equivalent to establishing a reserve in advance. When the actual losses and expenses are incurred, enterprises have the ability to digest themselves, so that they will not have a great impact on the sound operation of enterprises. "No overestimation of earnings" is also a kind of self protection for enterprises, because some of the revenues recognized according to accrual basis requirements may not be actually received in the future.

If we overestimate revenue and increase profits, we must increase business tax and income tax ahead of schedule, which means that the enterprise overdraws a sum of money in advance, which is unfavorable for the steady operation of the enterprise.

At the same time, accounting results based on the "two no" principle confirm that accounting information can be used to make decisions based on relatively conservative information and increase the robustness of decision making.

(four) prudent accounting principles should play a guiding role.

In accounting, prudent accounting principles can play a guiding role in the following two aspects: on the one hand, the prudence principle plays a guiding role in formulating accounting system.

Generally speaking, the accounting system in the world tends to be conservative and steady. The application of prudent accounting principles appears more and more in the accounting specific accounting system.

On the other hand, the principle of caution has become an important basis for guiding accountants to make professional judgments.

When dealing with certain economic activities and accounting matters, we should try to choose "not underestimate loss and cost" and "do not overestimate income" as far as possible, so as to reasonably calculate possible losses, expenses and incomes.

Three, the practical significance of the steady use of accounting policies in state-owned commercial banks. (1) the use of sound accounting policies is a realistic requirement for guaranteeing and improving the quality of state-owned commercial banks' assets.

The quality of bank assets directly reflects the safety level of bank operation, and affects the profitability of banks, the size of capital losses, the liquidity of various assets and the credibility of banks.

At present, the low quality of assets of state-owned commercial banks has become the most prominent problem that puzzles the reform and development of state-owned commercial banks.

Because China's state-owned commercial banks have not implemented prudent accounting policies for a long time, their real operation is not only facing heavy historical burden of huge non-performing assets, but also deteriorating the structure of non-performing assets, increasing the proportion of "double stay" loans and increasing the proportion of losses.

It is still very arduous to complete the State Council's outstanding reduction of 2-3 percentage points per year.

Therefore, in accordance with prudent accounting principles, it is of great practical significance to objectively analyze the historical reasons for forming a huge amount of non-performing assets, and to prudently calculate and confirm the effective assets in the real operation and to write off the bad assets reasonably.

Two, the use of sound accounting policy is a realistic requirement to prevent state-owned commercial banks from operating risks and ensure sound operation.

Commercial bank itself is a high-risk industry, and its business has various risks.

Prudent accounting principles can fully reflect and reduce the operational risks of state-owned commercial banks.

This principle can reflect prudently the uncertainties in operation, and try to ensure that the inherent risks and uncertainties in business operations are fully taken into account.

Its core is "reasonable calculation of possible losses".

The principle of prudence should be implemented, and reasonable estimation of risks should be made. Facing the reality and reflecting it, we can make it pay attention before the actual occurrence and play an early warning role, which will help banks make the right business decisions.

From another point of view, prudent accounting principles can help to enhance the development potential and alleviate the pressure of business in the future.

In accordance with the requirements of "two no", accounting will reduce the current book profits in the short term, which seems to be unfavorable to the completion of business indicators.

But in the long run, we should give full consideration to the negative factors in the long run, and lay a solid foundation for the future business operation, eliminating the worries of the future and ensuring the long-term and steady operation of the banks.

Three, the use of sound accounting policy is a realistic requirement for changing the operation mechanism of state-owned commercial banks and speeding up the construction of modern enterprise system.

The outline of the "fifteen" plan clearly points out that "comprehensive reform of wholly state-owned commercial banks, conditional state owned commercial banks can be reorganized into State-controlled Shareholding Commercial Banks, and risk prevention mechanisms should be established to enhance their competitiveness.

We should improve the internal governance structure of financial institutions, form a strict management mechanism that combines constraints and effective incentives, improve the sound accounting system and improve the quality of financial assets.

It can be seen that through the accounting reform of commercial banks, a sound accounting system will be established to lay the foundation for the joint stock reform and comprehensive reform of commercial banks.

The reform of state-owned commercial banks in China should be divided into three steps in theoretical design: first, the state-owned commercial banks should improve the system of wholly state-owned companies and establish a corporate governance structure as a truly state-owned sole proprietorship according to the principle of clear property rights, clear responsibilities, separate administration and scientific management.

The second step is to reform the stock system.

On the basis of perfecting the state-owned sole proprietorship company system, we will carry out joint stock reform to qualified state owned commercial banks.

The third step is to create conditions for a gradual listing.

Eligible banks can take the way of combining the whole with the split, and do the listing separately and separately.

Practice has proved that corporate system is an effective form of organization of modern enterprise system, and it is also an inevitable choice for modern commercial banks to change their operating mechanism.

Driven by the reform of the financial system, some state-owned banks will be reorganized by shares and will be publicly listed.

In order to protect the interests of bank owners and creditors, the disclosure of accounting information will be subject to more stringent supervision by relevant departments. The implementation of prudence principle is conducive to fully disclosing the operational risks of banks to meet the requirements of users of accounting information.

(four) the use of sound accounting policies is a realistic requirement for promoting the operation mechanism of state-owned commercial banks in line with international standards and participating in international competition.

The principle of prudence is also a requirement of internationally accepted accounting principles.

The international accounting standards board (IASC), in the No. 1 international accounting standards, is one of the three elements (prudence principle, substance and importance), which has been recognized by accounting circles in various countries as one of the factors that determine the choice of accounting policy.

The definition of prudence is defined in the international accounting standards: "prudence means that when there is uncertainty, it is necessary to add a certain degree of discretion in the judgment that is required so as not to raise assets or profits, nor to depress liabilities or expenses".

Adapting to the requirements of joining the world trade organization, highlighting the internationalization of bank accounting standards, making it easier for foreign investors to better understand the financial situation, business results, cash flow and development potential of China's commercial banks, and facilitate our banking industry to raise funds in the international capital market, is an important trend of China's commercial bank accounting development.

In implementing prudent accounting policies, international accounting standards are mainly embodied in the following aspects: 1., pay attention to asset quality.

We should rationally confirm and measure the value of all kinds of assets of commercial banks, ensure the true and reliable assets value and improve the quality of assets.

In particular, commercial banks should analyze the risk level and the possibility of recovery according to the financial and operational conditions of the loan object and the overdue loans, etc., and draw lessons from the international practice and the Basel agreement, and make timely and full provision for loan bad debts.

2. recognised and measured or incurred losses and projected liabilities in the form of possible or contingencies that are more likely to occur or have losses, and fully disclose various secured businesses, pending litigation, loan commitments, bankers' acceptance bills and other derivative financial instruments.

3., in accordance with the provisions of the Basel agreement, we shall scientifically calculate the owners' rights and interests and scientifically calculate the capital adequacy ratio, so as to provide effective accounting information for commercial banks to study capital adequacy procedures, raise and enrich capital.

4., according to prudent accounting principles, we should confirm the interest income policy.

5., we should apply the principle of "substance over form" and conduct accounting in accordance with the economic nature of pactions or events. Instead of merely accounting for the accounting elements according to their legal form, we should ensure the accounting quality of accounting elements.

Therefore, we must realize the internationalization of accounting standards of commercial banks.

By introducing the internationally accepted accounting standards into China's commercial banks, the unified accounting standards within the banking industry, and abandoning the difference between the accounting standards of the wholly state-owned commercial banks, the listed banks and the unlisted joint-stock commercial banks, it should be the basic trend of China's commercial bank accounting development.

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