The Impact Of New Accounting Standards On Profit Statement Analysis

The new profit statement abolished the main business income and main business cost and other business revenue and expenditure items, but merged the relevant contents, including business income including main business income and other business income, business cost including main business cost and other business operations. Business tax and additional tax included tax and additional taxes in the original main business tax and additional and other business expenses.

The main business profit items were abolished, and the loss of asset impairment, profit and loss of fair value change, basic earnings per share and diluted earnings per share were increased.

According to the statistics of China Securities Daily, as of March 16, 2007, the proportion of non recurring profit and net profit in 2006 was increased from 10.4% in 2005 to 10.4% in 2006, which has published the annual report and has comparable data in 2006.

Non recurring gains and losses have improved rapidly in the performance of listed companies.

Under the new guidelines, debt restructuring and non monetary assets exchange may bring some non recurring gains and losses. S*ST long control is expected in the first quarter of this year.

About 284 million yuan, earnings per share amounted to 4.67 yuan.

The main reason is that the company debt restructuring has been completed in 2006. Since January 1, 2007, the relevant creditors have already waived the company's related debts. According to the new accounting standards, the debt restructuring income is 271 million yuan, which is included in the company's current profits and losses.

New trends that may arise: the enthusiasm of large shareholders to inject high-quality assets into listed companies (to confirm the restructuring proceeds, or to exchange interests through non monetary assets, to pfer benefits to listed companies), these high-quality assets will not only improve the performance of listed companies, but also raise the valuation level of listed companies.

After the implementation of the new guidelines, listed companies may obtain high value equity investment through low prices, so as to achieve the purpose of manipulating profits.

There are changes in content.

In accordance with the requirements of the new accounting standards, listed companies shall not make use of the provision for impairment of assets to adjust the profits of each period, or turn back the large amount after the huge amount of the previous period, adjust the profits arbitrarily, and not arbitrarily change the method of calculating and the proportion of the provision.

In addition to inventory, receivables, and sale of equity instruments, there is strong evidence that asset impairments that can be recovered are allowed to be pferred back. The impairment of non current assets such as intangible assets such as fixed assets and explicit amortization period is not allowed to be pferred back.

Therefore, it is a history for a listed company to achieve "one loss" through the above means.

The uncertainty of fair value changes.

If the investment real estate adopts the fair value mode for subsequent measurement, the impact on the profit will be uncertain.

But this model does not require depreciation and amortization, thereby reducing costs, and the impact on profits is positive.

According to the new accounting standards, the investment of trading securities must be calculated at the end of the term according to the market price announced by the exchange, and the change part shall be included in profits and losses.

If the shares held by a listed company are not pferred or sold, they should be measured at fair value, and the results will be recognized as current profits and losses.

According to the annual report disclosed this year, the total investment income grew very fast, and even some companies' performance was entirely supported by investment income.

Among them, short-term investment is lucrative and is one of the main sources of investment income growth.

The stock market in 2006 was so hot that the stock investment income of listed companies measured by fair value increased significantly.