Research On Accounting Methods, Tax Attributes Of Enterprises’Consolidation And Post-consolidation Performance

The financial storm caused by U.S.A. subprime lending crisis that has swept the globe, seriously hindered the development of world economy. But there was no evidence that dramatically increasing global enterprises’consolidations obstructed by it, and many companies possesses strong ability was catching rare low-cost expansion opportunities through the consolidations to accomplish the development strategy, especially Chinese consolidations in2010. According to the statistics, our country has accomplished since622merger deal in2010, including501transactions disclosing trading price to34.803billion dollars. Compared with294transactions completed in2009, trading price was up to111.6%. Even if China’s consolidations had been impacted by Europe debt crisis, there were record highs of merger deals in2011, which has accomplished1157consolidation deals, including985transactions disclosing trading to66.918billion dollars, compared with the same period last year, the average growth of86.0%in the consolidation cases, and transaction volume as high as93.2%.What is the charm of enterprise consolidation on earth? Karl Marx thought that capital can not give up to the pursuit of surplus value, and its nature is the profit. Enterprise consolidation is a complex economic activity, the tempting material interests must be hidden behind it. That makes capital inevitably pursue. Theoretically, consolidation trades can rearrange the combination of various resources, optimize the allocation of resources and realize the synergistic effect of consolidation, to complete the enterprise’s strategic development target.From institutional economics perspective, enterprise consolidation is the institutional evolution of combination of capital, gaming about economic institutions between enterprises, which root is institutions in a non-equilibrium state, that is, the net income of the existing institutional arrangement and structure are less than alternative one. To capture this new profit opportunities, the existing institutional arrangement and structure must be altered through enterprise’s consolidations. At the same time, various interest groups can finish the new combination of companies’control through the form of contracts to achieve the established strategic development target.From the view of enterprise consolidation’s accounting, the assessing of realization and persistence of synergistic effect finally focuses on the same index-consolidated performance. Although accounting and tax issues are difficult to be the main motivations of consolidations. under our socialist market economy circumstances, accounting methods and tax attributes of enterprise consolidations exactly influence the combined performances from different aspects.This paper based on accounting, economics, management and other related theory, summarizes and combs the domestic and foreign research achievement about consolidation performance, chooses the listed companies’ consolidation case as the study samples happened from2004to2008, and uses standard and empirical research methods to analysis accounting methods and tax attributes of enterprise consolidations how to influence the enterprise consolidation’s achievements, to establish the analysis frames about consolidation’s accounting methods, the tax attributes of target company and consolidated performance based on the dynamic and static points, to from the point of view of the enterprise merger qualitative define the scope, merger accounting method, the target company tax characteristics and merger of performance the related concept, analysis and explanation of the listed companies in China enterprise accounting method, the target company merger tax of merger performance characteristics may affect, and to rich the research on consolidated performance. Finally, it gets the following conclusions:In general, the empirical analysis results confirm that accounting methods and tax attributes of consolidations could influence consolidated performance in different degree. Among them, the influence degree to the capital market was more intensive than to the Tobin’s Q in the short time and the financial indexes in the long times, to the Tobin’s Q in short time was stronger than to the financial indexes in the long time.First, with the stretching event window, CAR of Capital market significantly increased, and the pooling of interest method can cause more significant fluctuations of CAR than the purchase method, which shows that the capital market estimated more positive about future development of acquiring companies using the pooling of interest method than those using purchase method, and which may compel acquiring managers related to compensation planning with stock option to make preference the pooling of interest method and to structure the consolidated trade using the pooling of interest method; As to NOLs, the acquiring companies dissucceeded to NOLs had higher CAR, which might relate to the government compulsive intervention into the consolidation; And the conclusion of SUTB is consistent with foreign research conclusion, that is, CAR of the acquiring companies possessing SUTB was substantial fluctuations, which shows that capital market may hope combined company can obtain higher and more stable annual tax deduction, and indirectly increase dividend distribution.Second, Tobin’s Q of combined companies in the first date of balance sheet after merger was significantly affected by the consolidated accounting methods and tax attributes, but there was difference based on different consolidated types and payment forms. Among them, under the controlling consolidations, the consolidated accounting methods and tax attributes of target company influenced most significantly to Tobin’s Q; under the cash payment, the consolidated accounting methods and NOLs affected most notably, but Tobin’s Q uncorrelated to SUTB.Third, Compared with financial performance before and after consolidation, the research found whether sort the sample as the consolidated accounting methods and tax attributes of the target company, the combined business performance or financial performance did not accomplish the synergistic effect.In sum, both theory and empirical analysis proof although there were different conclusions between short-term dynamic event research and long-term dynamic business comparing study, these conclusions can confirm that great differences in combined performance changed with the consolidated accounting methods and tax attributes. At the same time, static analysis also means that the combined accounting methods and tax attributes can significantly change consolidated performance, to supply regulators with credible theories and experience witness, to improve the perfection of related laws and institutions.