Two Problems In The Reversal Of The Impairment Loss Of Fixed Assets

1. The determination of the amount of the impairment loss. The accounting standards and the international accounting standards in China both take the amount of the recoverable amount of the fixed assets greater than the book value as the precondition for the return of the impairment loss already referred to in the previous period.

However, on the determination of the maximum limit and the amount of the reversal of the impairment loss, different standards are implemented: (1) the maximum limit for the loss of the impairment loss is different.

China's accounting standards shall be the maximum amount of fixed assets impairment provision originally prepared, and the impairment loss should be no more than the carrying amount of the impairment loss (actually the book value after depreciation based on historical cost, the difference between the book below) and the book value as the maximum limit for the reduction of the loss.

(2) the procedures for determining the amount of return are different.

In accordance with China's accounting standards, the procedure is to calculate the difference between the recoverable amount and the book value first, and then compare the difference with the already prepared impairment allowance, and take the small amount as the amount of the loss.

While the international accounting standards use the recoverable amount to compare with the book value of the assets that did not confirm the impairment loss in the previous year, the small holder first determines the book value of the assets after the return, and then deducts the amount of the impairment loss from the book value of the assets after the return of the assets.

Compared with the international accounting standards, there are two deficiencies in the method of determining the amount of impairment loss in China's accounting standards: 1, violating the prudence principle.

The purpose of the provision for impairment of fixed assets is to prevent overestimation of the value of fixed assets, mainly based on accounting estimates.

The reversal of the impairment loss of fixed assets can be regarded as an amendment to the original accounting estimate. The book value should be restored to the net book value of assets at the time of no impairment, that is, the original value of the fixed assets minus the amount accumulated after the accumulated depreciation.

However, according to China's accounting standards, when the amount of the recoverable amount is greater than the amount of the assets in the previous year, when the book value of the impairment loss has not been confirmed, the impairment loss that will be pferred will make the book value after the return higher than the net book value after the accumulated depreciation, and thus overestimate the asset value, which is contrary to the original intention of preparing the impairment allowance and violates the prudence principle.

It is more in line with the principle of caution to return the impairment loss according to the international accounting standards.

2, expand the earnings management space.

The policy of impairment of Assets Reserves gives enterprises more rights to make professional judgments. Because of the different criteria and criteria of professional judgment, or for certain needs, it may become a means of earnings management.

When the production and operation situation is very poor in a certain year, enterprises often hold the idea of "breaking the pot and breaking down", underestimating the value of assets, making more allowance for depreciation, and exaggerating the amount of losses of enterprises.

In the next second or third years, it will overestimate the recoverable amount and make the difference between the book value and the book value higher than the impairment provision already prepared. The impairment allowance will be fully pferred to increase the profit of the enterprise and raise the asset value. The listed company or ST company with poor performance can get rid of the risk of being wearing the hat of ST or being delisted for three consecutive years.

If the book value after the return is controlled according to the provisions of international accounting standards, it can reduce the amount of refunds of impairment losses and narrow the space for enterprise earnings management.

In order to fully reflect the principle of prudence, the author believes that the net book value after depreciation should be taken as the maximum amount of the book value after the conversion, so as to determine the amount of return of the impairment loss.

Two, the handling of the taxable income after the impairment loss is reversed. According to the "pre tax deduction method" of the enterprise income tax issued by the State Administration of Taxation, when calculating the taxable income, the expenditure on inventory depreciation reserve, short-term investment depreciation reserve, long-term investment depreciation reserve, risk reserve fund (including investment risk reserve fund), and any form of reserves other than the reserve available by the state tax laws and regulations shall not be deducted.

Therefore, the provision for fixed assets depreciation reserves can not be deducted from the taxable income.

However, there is no specific provision for whether the impairment loss should be included in the amount of taxable income.

According to the author's understanding, according to the consistency of accounting treatment method, since the expenditure of the provision for impairment reduction is not deducted, the impairment loss should not be included in the taxable income.

In the process of disposing of fixed assets, if the fixed assets impairment reserve is not fully refunded in China, there will still be a credit balance in the account of fixed assets depreciation reserves.

As a reserve account for fixed assets accounts, the book value of fixed assets is calculated, and net profit and loss are determined. The net profit and loss should be included in the taxable income according to the tax law.

The author thinks that this method is not proper and can not maintain the consistency of accounting policies.

When disposing of fixed assets, the write off of "fixed assets impairment provision" should be regarded as the reversal of the impairment reserve, and a separate accounting record should be compiled, and the "fixed assets impairment allowance" should be written, and the "extra business expenditure - the provision for fixed assets impairment" should be credited, and the amount should be deducted from the taxable income amount when the tax declaration and the nuclear tax are made, and the income tax shall not be calculated.

Only in this way can the accounting treatment for the impairment allowance correspond to the provision for impairment reduction, return to the impairment loss, disposal of fixed assets, and the method of calculating the taxable income amount is consistent.