Accounting Thinking On Establishing Second Board Market In China

Recently, China's active planning to create the stock second board market has aroused widespread concern in all aspects. The second board market is also known as the growth enterprise market, small and medium enterprises or small cap Market, alternative stock market and growth stock market.

Corresponding to the main board market (the first board market).

Especially refers to the new capital market outside the main board, which provides financing channels for newly emerging companies and small and medium-sized enterprises.

The impact of the second board market on China's capital market is beyond doubt. This article mainly discusses the impact of the second board market on the accounting field.

1. requirements for innovation of accounting information system.

The second board market provides an effective financing channel for companies with high growth potential or development potential, especially for high-tech companies.

It is said that in the second board listed enterprises, the amount of capital contribution made by the sponsors in intellectual property and non patented technology is up to 70% of the registered capital of the company from the main board, and can even be determined according to the agreement of the sponsors, that is to say, the valuation of the intangible assets can be very high. 20%.

The financial accounting standards board of the United States believes that...

Intangible assets refer to economic resources without material form, whose value is determined by their possessive rights and other future interests, but monetary resources (such as cash, accounts receivable and investment) are not regarded as intangible assets.

(Note: "accounting theory" Tang Yun, Qian Feng Sheng Shanghai University of Finance and Economics press August 1997 edition) intellectual property, non patent technology, etc. as intangible assets itself has the characteristics of high uncertainty that can bring to the enterprise in the future period. If the development prospects of listed companies are not optimistic, the intangible assets will be worthless.

Therefore, enterprises in the second board market have higher risks, and the recognition of intangible assets should follow the principle of prudence.

Accounting problems arising from the unique trading activities of the 2. second board market.

For example, the companies listed on the second board can break the boundary between state-owned shares, legal person shares and individual shares, so as to realize the full circulation of the shares of the company, and in addition to the main board, they can reduce the participation of state-owned shares and legal person shares and realize the same rights and shares.

The second board market provides the best channel for the distribution of venture capital. The characteristic of the venture capital is to gain the investment reward in the form of capital appreciation, and keep the capital and investment activities to flow periodically.

When venture capital helps the company to pass the risk period, it will be sped out through the second board market to sell stocks, over-the-counter pactions, share repurchase, merger and liquidation, so as to obtain investment benefits and enter the next round of entrepreneurship.

(Note: "analysis of the second board market and China's development strategy" Zhang Guihua's investment and securities second issue in 2000) resulted in capital withdrawal accounting.

In addition, because of the risk factors in the second board market, it will undoubtedly lead to the rapid development of the recognition and measurement of derivative financial instruments such as futures and options.

The 3. demands for accounting information disclosure are higher.

The second board market has adopted a way of "wide entry and strict management" for listed companies.

The threshold of listing is significantly reduced: the equity capital issued by the sponsors before the issue can be reduced to 20 million yuan (50 million of the main board). There is no need to have a record of continuous profits in the past 3 years. It only requires at least two years of paction records, to a certain extent, reflects its high growth; the number of shareholders who have a face value of more than RMB 1000 yuan or less (1000 of the main board), has solved the problem of raising capital in the early and middle stages of the immature stage and the early stage of industrialization. At the same time, it has also put forward a more stringent information disclosure mechanism than the main board market, requiring the disclosure of financial information of listed companies to be more detailed and frequent, so as to ensure the authenticity, completeness, continuity, timely and fairness of the information, so as to ensure the high pparency of the market. Compared with the main board market,

The information disclosed by listed companies includes (but is not limited to) prospectus, listing notice, allotment specification, periodic report and interim report.

For example, regular reports can require enterprises not only to provide annual reports, interim reports, or even quarterly reports, but also to adopt online real-time reporting system and publish information through gem website to ensure timely disclosure of information.

Companies listed on the second board generally have certain growth potential, so their accounting reports can also provide some relevant information on future forward-looking, uncertain information and derivative financial instruments, information technology assets, human resources value and so on. Some projects can even adopt fair value measurement model to provide useful information for the future, and provide more detailed external disclosure for the company's huge intangible assets.

Two, the new connotation of corporate financial activities. The companies listed on the second board are also different from those listed on the main board.

As far as financing is concerned, the establishment of the second board market is based on some small and medium-sized enterprises with potential growth potential which can not meet the requirements of the listing of the main board. The starting point of the technological content of the products is high, the maturity of technology, the acceptance and competitiveness of the market and so on are uncertain, and the investment risk is large, so it is difficult to attract general financial investors.

These small and medium-sized enterprises can raise funds in the second board market, and after introducing the sponsor system and market maker system, they can ease the frequent fluctuation of stock prices and improve the circulation of shares.

In the early stage of setting up the second board market, institutional investors such as banks, insurance companies and investment companies can be cultivated more, and the retail investors who are not able to resist risks should be properly restricted.

Such enterprises should pay more attention to the impact of huge intangible assets on the evaluation system of enterprise value and financial indicators when carrying out financial analysis.

As far as dividend distribution is concerned, such enterprises are mainly concentrated in high-tech, potential growth industries such as communications, biopharmaceutical, biochemical agriculture, network and so on. Therefore, enterprises can consider more retained profits and less cash dividends, so as to raise lower cost funds for the development of enterprises.

In addition, the sharp fluctuations of the company's shares may also impose higher restrictions on the operators. It is necessary to maintain a good performance of the company, and even reduce the moral hazard of the principal agent.

The 10% will be expanded to more than 10%. When the market is mature, it will be lifted and the T+O settlement system will be abolished. At the same time, once the major problems arise, the enterprises will face the strict withdrawal mechanism. The small size, large themes, and easy manipulation or manipulation of stock prices will determine the huge potential risks of investors in the second board market. As a result, the audit reports of listed companies, which are the main basis for investors' decision making, play an important role. Accordingly, higher requirements for Certified Public Accountants' audit reports are put forward than the main board market. The high risk mechanism itself contains high risk of registered accountants, especially the audit of earnings forecast reports should be more cautious. Otherwise, CPAs may encounter more litigation disputes. Three, it is urgent for CPA to improve the quality of audit.

In a sense, this is also a positive external incentive factor for the development of China's citations, which can significantly improve the quality of the audit business.

The foreign second board market represented by the US NASDAQ has been developing rapidly in recent years. It has even led the new economic trend to a certain extent.

The establishment of China's second board market is also like arrow in the string, which is an important means to promote the development of China's stock market, adjust the industrial structure and promote economic reform.

The reform and development of the capital market has brought new challenges to the various fields of accounting and deepened and perfected it. Otherwise, it will also promote the prosperity of the capital market.