The Impact of Depreciation and Amortization on the Financial Surplus or Deficit in National Universities

• Main Authors: Wen-Fu Chan, 詹文福
• Other Authors: Ying-Fang Huang
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/39616557593331199913

碩士 === 國立高雄應用科技大學 === 工業工程與管理系碩士在職專班 === 102 === Since 1999 onwards, in Taiwan the national universities/colleges have started to comprehensively implement school fund system. Although it has been beforehand prepared many years, after more than a decade’s implementation, there are still many universities/colleges that cannot reach balance between income and expenditure financially. Among them, both failing to grow year after year and failing to improve the deficit actively have always been the two main issues concerned by the supervisory authorities and each university/college. Except that, the prior research associated with the school fund mostly centers on the discussion of the school fund performance. Few of them explore the real causes of poor performance of the school fund. In addition, in the perspective of discussing the problems of school fund most of them cannot be viewed empirically. Accordingly, this study aims to analyze the accounting treatment of school fund capital assets, which uses the empirical analysis of the depreciation and amortization in the case that influences the current period’s deficit to simulate the analysis of the national university’s due current period financial surplus or deficit. The findings in the current study, in-between 2010 and 2013 there are about 80 percent of university’s school fund which appears deficit and has the trend of increase annually. However, the working cash flow shows positive every year, in which the expenditure of the depreciation and amortization without influencing cash accounts for 13 percent of national universities’ operating costs and expense. After the regression analysis, it shows the real property, buildings and equipment have significantly negative influence on the deficit of the current period financial surplus/deficit, the components of which such as asset funds, custodial assets on behalf, and donated surplus are the same. As a whole, the research reveals the depreciation and amortization are the key vital factors that influence the deficit of the current period financial surplus/deficit. After performing simulation analyses further, it finds that there are no financial deficits of all national universities’ school fund if all or 75% of the depreciation and amortization expenditures are recognized as revenues. However, it appears around 10% of national universities’ school fund are under financial deficit if 50% of the depreciation and amortization are recognized as revenues. Furthermore, it will appear half of national universities are under financial deficit if 25% of the depreciation and amortization are recognized as revenues. After the analysis of all case schools, this study finds that using the calculating alternative of “without financial deficit” or the depreciation account treatment to change the alternative, it can increase 200 million in earnings for all schools and can get schools out of the red, which is worthy of references for managers.