| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 94 === SFAS No. 35, Accounting for Asset Impairments, was released on July 1st of 2004 by Financial Accounting Standards Committee of R.O.C, providing accounting standards for impairments of long-term assets, including measurement of impairment losses, timing of recognition, the methods of measurement for different types of assets, etc. The Statement allows companies to decide when to adopt the accounting standards for asset impairments either from the first quarter of 2005 or from the fourth quarter of 2004. The alternatives provide corporate managements with a chance to decide when to recognize the impairment losses. To decide when to adopt the accounting standards, managements may take into account of the impact of the potential impairment losses on firms’ financial statement performances.
With different product cycles and competition pressures, the value of assets in use will be quite different across industries, and thus the possibilities and amount of asset impairments may also vary across industries. Besides, companies with different components and characteristics of long term assets are likely to have different possibilities and amount of losses incurred from asset impairments. Therefore, the objective of this thesis is to examine the relationship between the reported asset impairment losses and firm characteristics of listed companies, using samples reporting asset impairment losses in either the fourth quarter of 2004 or the first quarter of 2005.
The results of this study show that listed companies choosing to early adopt the Statement in the fourth quarter of 2004 recognized greater amount of impairment losses than those adopting the Statement in the first quarter of 2005. Furthermore, ceteris paribus, listed companies with greater debt ratios recognized more impairment losses, while those companies with better operating performance recognized less impairment losses.
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