The reasonable application of the principle of conservatism can reasonably estimate the risks existing in the operation of enterprises, and resolve them before they occur, which plays an early warning role in preventing risks, and is conducive to enterprises making correct business decisions, protecting the interests of owners and improving market competitiveness. [Keywords:] the principle of robustness; Accelerated depreciation method; Accounting standards for enterprises. Accounting uncertainty is the premise of the existence of conservatism principle. Accounting uncertainty refers to the accounting information that the final result is gain or loss in one or more situations and situations, and can only be confirmed when one or more uncertain future events occur or not. In our present society, due to the continuous progress of science and technology and the rapid development of economy, the speed of information dissemination is getting faster and faster, which makes the uncertainty of information in the accounting field more and more complicated. However, the causes of accounting uncertainty can be summarized as two. One is the external cause, that is, the uncertainty of accounting information caused by the constant change of the external environment of accounting system, such as the commitment of enterprises and the credit related to bank loans. As a necessary financing tool and transaction guarantee in enterprise management, credit is an important reason for enterprise accounting uncertainty. Exchange gains and losses caused by different exchange periods in foreign currency business, amortization of intangible assets of enterprises and the validity period of contracts will also cause the assets of enterprises to change constantly with time; In order to obtain excessive economic benefits in production and operation, enterprises must have certain risks. Because of this risk, the accounting information of enterprises is naturally uncertain. In addition, the survival and development of enterprises are always inseparable from society and environment, so accounting information is bound to be affected by factors such as tax rate, price change index and inflation, which makes the assets of enterprises constantly change. Another reason is the internal cause, that is, the uncertainty of accounting information caused by the uncertainty in the internal information processing of accounting system. For example, in the confirmation, measurement, recording and reporting of accounting personnel, the accounting information of enterprises is constantly changing due to the limitation of their own business level or professional ethics. In a word, accounting uncertainty is directly aimed at the quality of accounting information, which determines the inevitable existence of accounting uncertainty. "Uncertainty, as a universal constraint, has become the basis of the traditional accounting concept of conservatism. Generally speaking, conservatism is neither a hypothesis nor a constraint, but in applications, it is used as a constraint to display data that may be unreliable and relevant. " The principle of conservatism is an inevitable response to accounting uncertainty. Accounting is the product of the combination of economy, technology and people. The existence of accounting uncertainty means the existence of risk. When there are risks, people will naturally take measures to find safe ways to avoid risks and protect themselves. The principle of conservatism in accounting work is a widely used method. For example, in the face of the uncertainty of accounting work, property trustees, auditors and investors require that the disclosure of accounting information must adopt the principle of conservatism for different purposes, such as reducing fiduciary responsibility, reducing audit responsibility, avoiding or reducing investment risks and making correct and reasonable decisions. To sum up, the existence of accounting uncertainty is the premise of the existence of conservatism principle in accounting work. Second, the application of the conservatism principle and the problems that should be paid attention to (1) the specific application of the conservatism principle in accounting work. The principle of conservatism, also known as the principle of prudence, can be understood as requiring accountants to "carefully" choose accounting methods and procedures according to the degree of accounting uncertainty when they have different accounting methods and procedures to choose from in certain economic operations or accounting matters, and fully consider other accounting principles, such as the principle of relevance, the principle of objectivity and the principle of proportion. 1992 The Accounting Standards for Business Enterprises promulgated by the Ministry of Finance and the accounting systems and financial systems of different industries have made some provisions on the application of conservatism principle in enterprises, such as allowing provision for bad debts, adopting accelerated depreciation method for fixed assets in some industries, and adopting LIFO method for inventory valuation. However, with the gradual development and improvement of China's socialist market economic system, the above-mentioned conservatism principle has become increasingly unable to meet some practical needs in this process and meet the modern development requirements of international practices. Therefore, the application of conservatism principle has been further adjusted and stipulated in the Accounting System of Joint Stock Limited Companies promulgated by the Ministry of Finance1June 27, 998 and the specific accounting standards gradually revised, and its specific application can be summarized. According to the accounting system of joint-stock companies, the final valuation of inventories and short-term investments can adopt the lower of cost and market price, that is, the impairment reserve of inventories and short-term investments can be withdrawn, and the amount whose market price is lower than the cost is recognized as the current loss. In addition, enterprises should regularly check the book value of long-term investments item by item. If the recoverable amount is lower than the book value of the investment due to the continuous decline of the market price or the change of the operating conditions of the investee, the difference shall be written off first, and the insufficient part shall be recognized as the current investment loss. 2. Adopt accelerated depreciation method. The application of accelerated depreciation method is strictly stipulated in the accounting system promulgated by 1992, but the application scope of accelerated depreciation method is not limited in the accounting system of joint-stock companies. Enterprises can choose depreciation methods appropriately according to the nature and consumption mode of fixed assets. 3. Amortization of intangible assets. The specific standards and accounting system of joint-stock companies stipulate the amortization of intangible assets, and the amortization period is shorter than the contract or legal period or operating period. If there is no fixed term stipulated in the contract or law, it shall be amortized according to the term not exceeding 65,438+00 years, while the industry accounting system stipulates that it shall be amortized not less than 65,438+00 years. For the amortization of start-up expenses, the industry accounting system stipulates that it should be amortized within a period of not less than 5 years, while the accounting system and specific standards of joint-stock companies change it to an average amortization of not more than 5 years. If the start-up cost is not large, it can also be amortized once in the month when production and operation are started and included in the profit and loss. 4. Accounting treatment method of investment. The Accounting Standards for Business Enterprises-Investment stipulates that the long-term equity investment obtained by abandoning non-cash assets shall be determined according to the fair value of the abandoned non-cash assets. The difference between the fair value and book value of abandoned non-cash assets, after deducting the income tax payable in the future, shall be used as the preparation item of capital reserve. If the fair value of the obtained equity investment is clear, the fair value of the equity investment can also be determined. When the equity method is used for long-term investment, the difference between the investment cost of the investment enterprise and the share of the owner's equity of the invested enterprise in equity investment shall be amortized evenly within a certain period of time in accordance with state regulations and included in profits and losses. The amortization period of the equity investment difference, if the investment period is stipulated in the contract, shall be amortized according to the investment period; If the investment period is not specified, the difference between the investment cost and the owner's equity share of the investee is generally amortized within a period of no more than 65,438+00 years (including 65,438+00 years), and the difference between the investment cost and the owner's equity share of the investee is generally amortized within a period of no less than 65,438+00 years (including 65,438+00 years). The reason why the above two completely different methods are used to deal with the appreciation and depreciation of long-term investment equity investment and the amortization period of long-term investment equity investment difference is precisely to follow the principle of conservatism. 5. Confirm income (investment income). In the industry accounting system, the recognition of income is relatively simple, rigid and superficial, such as "goods have been issued and services have been provided;" The payment for goods has been received or the relevant vouchers for payment have been obtained ". However, the Accounting Standards for Business Enterprises-Income stipulates the recognition standard of income in a relatively principle and pays more attention to the economic essence of transactions. For example, in the transaction of commodity sales, enterprises are required to correctly judge whether the main risks and rewards of commodity ownership are actually transferred to the seller; Whether the enterprise neither retains the right to continue management, which is usually associated with ownership, nor controls the goods that have been sold; Whether the economic benefits related to enterprise transactions can flow into the enterprise; Whether the related income and cost can be measured reliably. Only when the sales of the enterprise meet the above four conditions can the income be recognized, otherwise, if any of the conditions are not met, even if the payment is received or even if the goods have been sent out, the income cannot be recognized. For another example, in the recognition of income from labor services provided by enterprises, if the start and completion of labor services belong to different accounting years, and the results of transactions can be reliably estimated on the balance sheet date, income should be recognized according to the degree of completion of labor services; If the enterprise cannot make a reliable estimate of the transaction results on the balance sheet date, it shall confirm the income according to the labor cost that has occurred and is expected to be compensated, and carry forward the cost according to the same amount; If the labor cost that has occurred cannot be fully compensated, the income shall be recognized according to the amount that can be compensated, and the cost shall be carried forward according to the labor cost that has occurred, and the difference between the confirmed income amount and the labor cost that has occurred shall be recognized as a loss; If the expected labor costs can't be fully compensated, the income is not recognized, but the costs that have already occurred should be recognized as the current expenses. It can be seen that the income recognition principle stipulated in the accounting standards for business enterprises-income is more stable and reliable. #p# Paging Title #e# Investment Standards stipulate that cash dividends or interest on short-term investments should be written off against the book value of the investment when actually received, and shall not be recognized as current income. (2) Robustness principle 1 Problems that should be paid attention to in practical application. The application of conservatism principle should correctly handle the conflict with other accounting principles such as objectivity, matching, comparability, correlation, reliability and accrual basis. For example, the principle of objectivity is to reflect the financial situation and operating results of an enterprise according to the actual economic business in accounting work, while the principle of conservatism requires to reflect losses, expenses or income, assets, etc. What may happen in enterprise accounting practice but has not yet happened. In addition, the principle of conservatism has obvious tendency in safeguarding the interests of investors and enterprises, which urges enterprises to adopt various forms of "cautious" behavior to achieve the set goals. Therefore, it may lose its objective status. Based on the above reasons, in our economic activities, we should take some necessary measures and means to alleviate their conflicts. First of all, we should reasonably determine the priority of accounting principles. 12 accounting principles, the principle of objectivity is in the primary position, and the principle of conservatism must be implemented and applied on the basis of maintaining the principle of objectivity. As for the use order of other accounting principles, due to the different specific circumstances of each enterprise, it can be determined reasonably according to the actual situation. Second, the conflict should be fully disclosed. Because each enterprise faces different uncertainties in different periods and different business environments, the application time, scope and degree of conservatism principle should also be different. Therefore, it is necessary for us to fully explain the application time, scope and degree of conservatism principle in information disclosure, and reveal the degree and change of the impact on the financial situation and operating results of enterprises due to the conflict with other accounting principles. Adequate information disclosure can effectively improve the comparability of information, enable information users who are interested in the enterprise to accurately grasp the financial situation of the enterprise, prevent conflicts from worsening and mislead accounting information users of the enterprise. Thirdly, make necessary restrictions on the application of conservatism principle, reduce the arbitrariness and subjectivity of operation to a certain extent, and effectively prevent and avoid the conflict between conservatism principle and other accounting principles. Finally, we should strengthen audit supervision and internal restraint mechanism. Because the conservatism principle has a strong randomness and tendency in actual operation, in order to prevent enterprises from arbitrarily changing accounting methods, overestimating losses, underestimating profits, falsely listing costs and expenses, and distorting real operating results, it is necessary to strengthen audit supervision, prevent abuse and misinterpretation of conservatism principle, and avoid artificially intensifying conflicts with other accounting principles. 2. The key to the application of the conservatism principle is to grasp the "degree" of the conservatism principle. Excessive application or insufficient application may reduce the advantages of conservatism principle, expand its disadvantages, and make the financial situation and operating results of enterprises unable to be accurately revealed, thus misleading the decision-making of accounting information users of enterprises. In the current complicated accounting environment, the degree of accounting uncertainty is gradually increasing. Since the conservatism principle reflects people's cautious attitude towards accounting uncertainties, accountants should be required to find a balance point when choosing accounting policy schemes, so as to maximize the advantages of the conservatism principle and constrain their own defects to the minimum. When grasping the degree of conservatism principle, accounting information should be divided into three categories according to its uncertainty: probable, largely determinable, extremely unlikely and somewhere in between. On the premise of fully considering the principles of relevance, objectivity and matching, the conservatism principle should be combined with the classification of accounting uncertainty, that is, those expenses or liabilities that are "determined to a large extent" and "likely to occur" should be confirmed and reflected in the accounting statements of enterprises, while those expenses or liabilities that are between "likely to occur" and "extremely unlikely" only need to be reflected and disclosed in the accounting statements. As for the expected income and assets, only those that are "to a great extent certain" should be disclosed and explained in the enterprise statements, while those that are "extremely impossible" should be carefully described and disclosed in the accounting statements and their notes without any treatment. But the most important thing is that when implementing the principle of conservatism according to the above classification, we must seriously and reasonably consider the cost-benefit balance among the principles of relevance, objectivity, proportionality and conservatism, and we must not "dogmatize" the implementation unilaterally, otherwise we will still make the mistake of improper use of "degree". In order to ensure that the principle of conservatism is embodied without damaging the relevance and reliability of accounting information, the state has made the following provisions in specific accounting standards: first, it is necessary to study and master specific standards or norms that are highly operational and "suitable for use"; The second is to establish and improve the external restraint mechanism; Third, it is necessary to study the relationship between accounting standards, financial system and tax laws and regulations, adjust the current enterprise performance evaluation methods, and enhance the internal motivation and tolerance of enterprises to moderately apply the principle of conservatism; Fourth, we should follow the principle of full disclosure of financial reports. Only in this way can the principle of conservatism be used more effectively and reasonably, and can it bring greater economic and social benefits to enterprises. 3. The principle of conservatism is based on the professional judgment of accountants and certain environment. Considering the reality of these aspects in our country, when implementing the conservatism principle, on the one hand, we should strive to improve the professional level and judgment ability of accountants, improve their professional ethics and optimize accounting behavior. On the other hand, in view of the differences between different types of enterprises in external information demand, enterprise management level and accounting team construction, the accounting system should be implemented in listed companies first, and then gradually extended to all enterprises when conditions are ripe.

Starting with the relationship between conservatism principle and accounting uncertainty, this paper demonstrates the objective inevitability of conservatism principle under the current accounting model. However, as an international practice, it is a dynamic concept, which must be endowed with new connotations: moderation and steadiness. Qualitative and quantitative are two aspects of understanding moderation, the core of which lies in the accurate estimation of possibility. The financial accounting of enterprises in China should follow the principle of moderate conservatism, rather than the traditional conservatism convention.

Keywords: the principle of conservatism; Uncertainty; Moderate; Probability; possibility

Following the principle of conservatism is a long-standing practice in the field of financial accounting to deal with uncertain economic business, which still affects the valuation of assets and the determination of income in accounting. However, people have never stopped questioning its position in the accounting system and the application of accounting standards, especially under the current accounting model, the call for the conservatism principle to seek reform is very high. Where is the principle of conservatism going? How to understand its new era connotation? And how to realize it in China enterprises? This paper is intended to draw attention to the topic and make a preliminary discussion.

First, moderate stability: the inevitable choice under the current accounting model

The fundamental reason why the principle of conservatism occupies a place in the accounting system lies in the competition and risk in the market economy, and the original intention of conservatism is to avoid risks. In the field of financial accounting and reporting, conservatism-prudence and other conventions have their reasons for existence, because the economic activities of enterprises are carried out in an environment full of uncertainty (SFAC No.2). Therefore, uncertainty in accounting is the premise of the existence of conservatism principle and the fundamental basis for testing conservatism principle. Historically, managers, investors and accountants generally prefer to underestimate the possible errors in measurement rather than overestimate the net income or net assets, which leads to the establishment of the principle of conservatism. In addition, the principle of conservatism is also considered as a necessary offset to the optimism of management, which is helpful to reduce the potential liability risk of accountants when disclosing accounting information. Generally speaking, the principles of uncertainty and conservatism are the combination of inevitability and contingency in accounting. Once the method and amount that is not conducive to net assets and current profits are selected when dealing with uncertain economic business, it means the application of conservatism principle.

Undoubtedly, the inherent limitations of the conservatism principle itself are obvious, and its accounting practice of retreating from the dominant accounting principle in the past is a strong proof. Generally speaking, the principle of conservatism requires "never predict profits, but predict all losses". This first seems to lose the "true and fair" accounting position and distort the real accounting data; Secondly, it conflicts with accounting principles such as accrual basis, historical cost, proportion and consistency. Thirdly, the application of conservatism principle still lacks proper rigid standards, which is mixed with subjective factors of many accountants. A typical example is the application of "which is lower, cost or market price" in inventory valuation. Moreover, the principle of conservatism deviates from the target mode of constructing standardized accounting theory system with the view of "decision usefulness" under the current accounting model. Decision-making usefulness view holds that accounting information is diversified and decision-making is diversified, which requires a comprehensive reflection of the influence of social environment on the present and future operation of enterprises. In view of the increased risks and uncertainties of enterprises caused by the strong changes in the economic environment, the following information is extremely important: (1) information of enterprise divisions; (2) Innovative financial instrument information; (3) Off-balance sheet financing agreement information; (4) core and non-core business information; (5) Uncertainty information about the measurement of certain assets and liabilities; (6) quarterly information. Meeting the information needs of users of accounting information is the soul of the existence and development of financial accounting. These important information, which can lead to differences in decision-making, especially some information that belongs to the future but is directly related to the correct evaluation and judgment of the current financial situation and operating results of enterprises, are regarded as the "forbidden zone" of financial reports by the conservatism principle with historical cost as the main measurement attribute. For example, the development of goodwill accounting, human resource accounting and environmental accounting is difficult, and the constraint of conservatism principle is one of the important factors. On the contrary, it proves that the conservatism principle has serious defects under the current accounting model and it is necessary to face fundamental changes.

In short, in the face of increasing market competition and risks, it is natural to maintain a steady attitude when dealing with uncertain economic business, especially those with high uncertainty! However, the development of accounting is reflective. The so-called international practice is also a dynamic concept, and its content changes with the change of international environment. Therefore, the principle of conservatism must be given a new connotation, that is, moderate conservatism. Only by disclosing accounting information on a reasonable and prudent basis and striving to ensure that financial reports reflect the information they want to reflect can they be truly stable and meet the requirements of the current accounting model development.

Second, moderate interpretation: the combination of qualitative and quantitative.

The use of the principle of conservatism is moderately restricted, which has completely broken through the meaning of the traditional principle of conservatism. It is also the mainstream trend of conservatism principle in the field of international accounting. Moderation means that it is not allowed to create secret reserves, withdraw excess reserves, and deliberately and consistently underestimate net assets and net income. On the contrary, it requires that when there is enough evidence to show the existence and reliable measurement of assets or interests, it should be reflected; If there is not enough evidence to show that liabilities or losses have occurred and cannot be measured reliably, they should not be included. In fact, the moderate requirements for the use of the conservatism principle can also be explained from the perspective of modern economics. In the field of economics, risk and return are a pair of crucial concepts. Their changing law is that with the increase of uncertainty, their marginal return (return) is also increasing, which can usually be represented by a convex risk-return curve. According to this principle, it can be inferred that: 1. When the uncertainty is low, information users' preference for risk is almost neutral, and they demand objective and fair accounting information without prejudice. Therefore, the position of conservatism principle is relatively low, and assets (gains) and liabilities (losses) should be treated equally when dealing with accounting matters. 2. When the uncertainty is high, information users' preference for risk is convex, and when objective and fair accounting information cannot be obtained accurately, they think pessimism is better than optimism. Therefore, the position of the principle of conservatism is relatively high. When dealing with accounting matters, more is to confirm, measure and disclose liabilities (losses), while ignoring related assets (gains).

In essence, this also provides a theoretical framework for the application of the principle of conservatism, emphasizing that moderate mastery is the essential requirement of this framework. In a word, "good accounting standards should make financial reports neither mention more preparations for future difficulties nor defer the recognition of losses, and real profit fluctuations should not be artificially smoothed." (Arthur Levitt, 1998) Therefore, following moderate conservatism is in line with the requirements of leading to high-quality accounting information, which is a qualitative understanding of moderation.

What do you mean by low uncertainty and high uncertainty? The crux of the problem lies in: how to accurately estimate the size of uncertainty, judge its level, and then decide what accounting treatment method to adopt. Therefore, the understanding of moderation lies in the understanding of quantity.

"Degree" essentially refers to the degree of uncertainty, which refers to the "possibility" of the occurrence and result of economic business, and the possibility is usually expressed by probability. So in the final analysis, it is still necessary to make an accurate estimate of its possibility with probability values. At present, there are three popular possibility assessment methods in the world: 1. Mode probability method. It focuses on the most likely outcome. Under this method, if a certain result is most likely to happen, it is considered "possible", otherwise it is considered "impossible". 2. Cumulative probability method. The cumulative method for short is a method to judge the possibility of something according to the cumulative probability. If the cumulative probability exceeds 50%, the event is considered "possible", otherwise it is considered "impossible". 3. Weighted probability method. This method is similar to the expected value method in statistics, which is characterized by considering all possible results and the probability of each possible result, that is, multiplying each possible result value as a weight by the corresponding probability, accumulating the products to get the weighted probability, and calculating the possible results with the weighted probability. Relatively speaking, the weighted probability method is more accurate than the other two methods, because it comprehensively reflects all possible results and their probability distributions and embodies the principle of neutrality. Especially in the case that it is difficult to accurately determine all possible results and their joint probabilities (such as the results show continuous numbers), the amount estimation is more in line with the weighted probability method, various possible results and their probabilities. Of course, the "possibility" in financial accounting is by no means a "pure mathematics" problem, which is closely related to the establishment and measurement of uncertain matters. In this way, the concrete analysis and estimation of the possibility have to consider the influence of related factors, such as the nature of the measured object, the probability distribution characteristics of the event, the final possible result of each project and so on. In addition, due to the limitation of existing recognition standards, many uncertain items cannot be confirmed and disclosed in the table, and how to disclose them off-balance sheet is an important issue to provide this information. Moreover, even if we are guided by the needs of information users, we can screen out information that is helpful to users' decision-making according to the principles of possibility and importance, and grasp the degree and quantity of disclosure, which is inseparable from the accurate estimation of possibility.