This study examines how Statement Financial Accounting Standards (SFAS) No. 35, "Accounting for the Impairment of Assets," has the effect on the choice of earnings management and the substitution among accruals-based earnings management, real earnings management and asset write-downs. The results reveal that accruals-based earnings management and real earnings management are in effect substitutive. Moreover, the substitutive relationships between accruals-based earnings management and real earnings management was decreased after Accounting Research and Development Foundation in Taiwan issued SFAS No.35.