تاثیر استانداردهای حسابداری جدید برای شرکت های کسب و کار (ASBE)،بر نتایج مالی شرکت های فهرست شده سرزمین چین

Effective 1st January 2007, 38 new Accounting Standards for Business Enterprises (ASBE) had become applicable to listed companies in mainland China. Research based on these latest standards will help us understand the current accounting harmonisation process in China. Previous studies, though rather scarce, had compared financial statements of companies simultaneously being listed on the mainland and Hong Kong. However, the very recent impact of the new ASBE has not been taken into account. Therefore, the present study focuses on domestic Chinese companies after implementation of the new ASBE. The financial figures of each item reported under the old Chinese Accounting Rules and Regulations and the new ASBE were collected in pairs and were analysed. Except for the test results on total assets and shareholders' equity, the other results revealed no significant differences between the paired figures of net assets per share, operating revenue, profit before tax, net profit, net profit after extraordinary gains and losses, basic earnings per share, net cash flow from operating activities and the per share value.

Consistent with the trend of international capital markets, there is growing demand from accounting users for financial information which demonstrates a high level of objectivity, accuracy, comparability and transparency in mainland China. Refinement of the accounting standards is necessary in order to meet increasingly demanding global requirements. Harmonisation of reporting standards does not only bring transparency and instils confidence among foreign investors; it also reduces the costs of raising capital by enterprises and alleviates the risks of financial crises (Deloitte Touche Tohmatsu, 2007). In the past, many attempts of accounting reform have been undertaken in China to keep up with economic development. On 15th February 2006, the Ministry of Finance of China had issued a series of new and revised Accounting Standards for Business Enterprises (ASBE) comprising a basic standard and 38 specific accounting standards of which 22 were newly promulgated. These standards had become effective starting 1st January 2007 for listed companies on the mainland. The implementation of this new system represents substantial convergence of the ASBE with the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS), with due consideration being given to the unique situation in China. The new ASBE not only cover the recognition, measurement, presentation and disclosure of most general transactions and events, but also provide guidance for certain specific transactions and industries. The new standards have also brought in some new accounting principles and measurement requirements. As can be seen from above, the harmonisation process in China has been progressing rather feverishly in the recent years. However, in the academic arena of the Western world at least, up-to-date research which focuses on this area remained rather scarce. Most of the available studies, analyses and commentaries were published during the 1990s and early 2000s (e.g. Chen et al., 1999, Chen et al., 2002, Chow et al., 1995, Ding, 2000, Ji, 2001, Lin, 1998, Lin and Chen, 2000, Lin and Wang, 2001, Tang, 2000, Winkle et al., 1994 and Xiang, 1998). There have only been a few studies on changing accounting standards on the mainland during the past three years or so. Haverty (2007) published a case concerning China Eastern Airlines which is simultaneously listed in mainland China, Hong Kong and the US and therefore prepares three sets of financial statements using Chinese accounting standards, IFRS and US GAAP. Nevertheless, the paper is actually a case for students and does not provide much analytical insights into accounting standard changes. Biondi and Zhang (2007) made a comparative study on the IFRS and the Chinese ASBE promulgated in 2006. They analysed the two systems based on the dualistic characteristics of two accounting systems namely static (fair value) and dynamic (matching based). Their excellent analysis included detailed studies of the individual accounting standards of both systems from historical, economic and political economy perspectives. Unfortunately, they did not employ empirical quantitative data and therefore we are unable to verify their propositions. Also, their focus is only on accounting for business combinations so that we are unable to speculate the situation of convergence of the other standards. A recent publication which had actually addressed the issue of harmonisation in China is the study conducted by Ip and Noronha (2007). They performed a quantitative analysis to compare the financial reports of 30 Chinese companies simultaneously issuing H-shares in Hong Kong and A-shares in China. However, their research was conducted prior to the implementation of the new ASBE and therefore the impact of the new standards was not captured. They called for further studies so as to assess the real effectiveness of the new standards. Therefore, the present study aims to fill up the lacuna by analysing the impact of the new ASBE on selected financial statement items under Chinese domestic A-share reports, with a hope to shed some light on the most current harmonisation trend on the mainland.

The results of this study had evidenced that there were significant differences between the operating results (total assets and shareholders' fund attributable to equity shareholders) for the year 2006 prepared in accordance with the old and new accounting standards. The new ASBE had introduced some new accounting principles and measurement requirements, of which the most significant shift is the use of fair value in various reporting areas. In a fast-growing economic environment, the introduction of fair value would drastically increase reported profits or the values of items like trading securities and investment properties. This change actually enhances the relevance of accounting information as it closely connects the external financial market with the performance of companies. On the other hand, it shifts the huge uncertainties of the external financial market to the shareholders of companies, thus increasing the volatility in reported results and net assets of entities. And in practise, the determination of fair value may not be easy for enterprises. This may reduce the reliability of accounting information and increase the ambiguities that investors face. In addition to the dramatic changes in asset valuation posed by fair value measurement, the recognition of derivative financial instruments on balance sheet, the writing-off of equity investment difference balance and the provision for termination benefits are some other key areas that had caused significant changes in the two items. The discrepancies identified should be regarded as opportunities to facilitate further harmonisation of the Chinese accounting standards with the IAS or IFRS. Despite the above justified disparities, the harmonisation of Chinese accounting standards has in principal reached an acceptable level. Although the changes have posed some substantial gaps in certain areas, on the average, most financial figures (including revenue, profit and cash flow items) prepared under the new ASBE and the old standards did not show significant variances. In fact, most of the newly issued standards and revised standards do make reference to the equivalent IFRS and adopt the principles and treatments similar to their international counterparts. Consequently, the financial statements prepared under the new ASBE would be more comparable with those prepared in accordance with IFRS than they would have been in the past. Overseas investors and users of financial statements should benefit greatly from this minimised disparity. Nevertheless, the new ASBE also pose challenges to enterprises in terms of cost. For instance, complicated valuation and disclosure requirements for financial instruments will increase the related risk and cost for compliance in reporting. Although a ground-breaking progress in the harmonisation process has been attained with the implementation of the new ASBE, the new standards still allows space to accommodate the unique circumstances of the Chinese market. For example, in the areas of impairment of assets (ASBE No. 8/IAS No. 36) and related party disclosures (ASBE No. 36/IAS No. 24), some differences between the Chinese standards and IFRS still exist. Unlike previous accounting regulations in China and IAS No. 36 which allowed the reversal of impairment under certain circumstances, the new standard disallows such reversals. This reduces the chances for companies to manipulate their earnings. Concerning related party transactions, the new standard specifies that state-controlled entities should not be regarded as related parties simply because they are subject to common control from the state. However, state-controlled entities are within the scope of IAS No. 24. In the general perspective, IFRS allows the adoption of alternative treatments (e.g. treatments for borrowing costs, joint ventures, fixed assets and intangible assets) while the new ASBE generally prohibit alternatives so as to minimise the possibilities for earnings management. One of the major features of the new ASBE is to provide users of financial statements with more relevant information. The new standards make reference to IFRS and require the disclosure of useful information so as to provide users with more transparent information. However, the present study has primarily focused its analysis on comparative financial figures while analysis on note disclosure was limited. As a result, additional studies on the compliance and comprehensiveness of note disclosure in the financial reports will provide further insights on whether the Chinese companies have properly put the disclosure requirements into practise. This may endow the public with an auxiliary piece of evidence about the harmonisation progress in addition to the quantitative perspective. As pointed out by Ernst and Young (2007), due to the significant shift in accounting principles and many complexities brought in by the new ASBE, adopting the new standards is more than changing from one set of accounting principles to another. Changes should not just lie in financial reporting, but should also impact different aspects of the business such as operating strategy, risk management and the establishment and function of internal control. For example, since any change in an entity's net profit would affect its ability to distribute cash dividends and that some of the new requirements might reduce the entity's distributable profit, the entity may need to reconsider its existing dividend policy. Also, the new standards require disclosure of financial risk management policies. It might also be obligatory for an entity to judge whether the hedges and documentation on hand have been prepared in accordance with the hedge accounting requirements of the new standards. Lastly, internal control systems might need to be modified and improved to accommodate changes introduced by the new standards. For instance, the establishment of internal control to monitor transactions of derivative instruments is one example. These are some specific processes or systems-related areas to which further research can direct its effort so as to provide a deeper understanding on how the Chinese enterprises adapt their management systems to cater with the new accounting system.