The new accounting standards will have an important impact on the performance and asset value of listed companies, thus driving the revaluation of A shares and increasing new investment opportunities in the secondary market. In the new accounting standard system, the pricing method of listed companies' investment stocks, the determination of profit and loss of debt restructuring, the provision of asset impairment and the provision of investment real estate will be greatly affected.
Stock investment is based on market price: according to the new accounting standards, listed companies will use fair value minus the market price of the exchange to invest in trading securities, which will reflect the profits and losses of listed companies in short-term securities investment. According to the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments, transactional financial assets are measured at cost when acquired, and subsequently measured at fair value at the end of the period, and changes in fair value are included in the current profits and losses. The new investment standard revised the classification of adjustment investment, including trading securities investment, holding maturity investment and equity investment, in which trading securities investment is similar to the original short-term securities investment.
For the legal person shares held by listed companies, the new accounting standards generally do not recognize them as transactional financial assets, but as available-for-sale financial assets. For the measurement of this kind of assets, the new accounting standards stipulate that it is measured at cost when it is acquired, at fair value at the end of the period, and the difference between fair value and book value is included in the owner's equity. Benefiting from this rule, companies with outstanding performance improvement and owners' equity increase mainly include New Hope, Dongfang Group, Suibao Thermal Power, Jilin Aodong, Liaoning Chengda and so on.
There are new provisions on asset impairment: Article 17 of Accounting Standards for Business Enterprises No.8-Asset Impairment clearly stipulates: "Once the asset impairment loss is confirmed, it cannot be reversed in future accounting periods." Under the old accounting system, enterprises adjust their profits through the operation of asset impairment, including making a large amount of provision for asset impairment in that year, making a big loss in that year and earning it back in the next year, creating the illusion of turning losses into profits in the next year; Or choose a large number of withdrawals in a certain year, and then slowly rush back to manipulate profits in the next few years. Then for the listed companies whose assets were impaired before, they will generally rush back before the new standards are formally implemented, thus promoting the performance of these listed companies to be greatly improved in 2006. There are speculative opportunities in such companies, so they cannot be the focus of investment.
Restructuring profit: Accounting Standards for Business Enterprises No.7-Exchange of Non-monetary Assets stipulates that if the exchange of non-monetary assets meets the following two conditions at the same time, the fair value and relevant taxes payable shall be taken as the cost of the exchange assets, and the difference between the fair value and book value of the exchange assets shall be included in the current profit and loss: First, the exchange has commercial substance; Second, the fair value of assets exchanged in or out can be measured reliably.
For listed companies as debtors, the new debt restructuring criteria mean that once creditors make concessions, the benefits gained by listed companies will be directly included in the current income and entered the income statement. For listed companies that are unable to pay off their debts in Shanghai and Shenzhen stock markets, once their debts are fully or partially exempted, their earnings per share may be greatly improved. This provision is mainly beneficial to listed companies with heavy debts at present and will bring speculative opportunities. The listed companies with heavy debt burden are mainly companies with poor performance and can only be involved in speculation.
Value-added real estate is included in profit and loss: investment real estate standard is an important new content in this enterprise accounting standard system. The so-called investment real estate refers to real estate held to earn rent or capital appreciation, or both, mainly including leased land use rights, land use rights held for a long time and transferred after appreciation, buildings owned and leased by enterprises, etc. However, it does not include self-use real estate held for producing goods, providing services or operating management and real estate held as inventory.
Since the fair value of investment real estate also reflects the rental income assumed to be obtained in the future, under the fair value model, changes in the fair value of investment real estate are recognized as profits and losses, and depreciation or amortization is no longer needed. The impact of this standard will mainly be reflected in the enterprises in the park, especially those listed companies that want to gain long-term income from rental income to enhance their sustainable development ability. We believe that the listed companies affected by this rule are Lujiazui, Suzhou Gaoxin, Nanjing Hi-Tech, Waigaoqiao, New Huangpu and G TEDA.
In addition, under the new accounting standards, a new inventory accounting method is implemented, and the "last in, first out" method is cancelled, and the "first in, first out" method is adopted for accounting. For companies that originally used the LIFO method, the large inventory and low turnover rate will cause abnormal fluctuations in gross profit margin and profit.
In the first year of adopting the new accounting system, listed companies will make new adjustments to the assets, rights and interests and profits and losses of enterprises according to the above rules, which will lead to changes in the rights and interests and profits of listed companies, which will inevitably lead to re-adjustment of their stock valuation level, thus bringing great investment opportunities. Asset stocks, in particular, have achieved great asset appreciation in recent years, but the financial statements do not reflect the changes in their rights and interests. Once this appreciation is reflected in the financial statements, it will inevitably promote the rise of the stock price, so it can be used as an important investment target. Of course, because the change of accounting rules brings about the change of one-time income or rights and interests, it cannot fundamentally change the company's operating conditions, so when grasping similar opportunities, it is necessary to understand the company's development prospects and investment value.