Two basic factors cause the fluctuation of shareholder equity: one is the op erating achievements of companies , the so-called variable in the constant; the other is the investment behavior of investors, the so-called variable in the var iable.

Collection and analysis of data from the reconciliation statements of 1 382 listed corporations on differences of shareholders equity show that on the first day of the implementation of new accounting standards,income tax,minor shareholders equity and .

By using"the reconciliation statement of stockholder equity between the new and old accounting standards",disclosed together with the annual reports of 2006,the authors find that stock prices do not react to the total changes of shareholders\' equity in the reconciliation statement,but react to the items which are unexpected and related to future earnings significantly.