Research On The Consolidated Theoretical Issues Of The Consolidated Financial Statements

The Consolidated financial statements, based on the individual financial statements of the parent and subsidiary company, prepared by the parent, reflected comprehensively the financial position, operating results and cash flows of enterprise groups composed of parent and subsidiary companies which firstly appeared in the United States. With the rapid expansion of the scale and the development of transnational corporations, consolidated financial statements is known as one of the four financial accounting problems. it has been causing widespread concern in the academic community. The Theory Circle and Practice Circle internationally formulated a variety of Consolidation theories in the long-term study and explore. With the constant deepening of China's economic reform, more and more listed companies raise capital through offering public shares in capital markets. In order to protect the interests of investors, the Ministry of Finance promulgated the "Provisional Regulations on Consolidated Financial Statements" in 1985, issued the "Accounting Standards for Enterprises No. 33 - Consolidated Financial Statements'in February 2006, which has to further standardize the guidelines in the consolidated financial statements ,united of the practice of different treatment, clearly defined concepts, presented with the trend of convergence of international accounting standards in some respects .Although the guidelines begin at January 1, 2007 in the listed companies, the new guidelines in the consolidated financial statements should be improved in a number of provisions. This article starts with it to study the combined consolidated financial statements of theoretical issues, and attempt to explore the future positioning in Consolidation Theory of China.Firstly we introduced three combination theories. Then explore the main theoretical basis of theory choice beginning with the goal of financial statements, stakeholders, the nature of control, the understanding of equity, the economic nature of combination. Secondly, this paper described the effect on the choice of the combination theory by the combined method of theory and empirical research. First, from the vertical perspective, a completely comparative analysis of new and old accounting standards in the consolidated financial statements of china reflect the differences in accounting standards and the new provisions of combination reflect the entity theoretical trend. Next to compare the entity theory with the parent theory in the impact of balance sheet and income statement of listed companies. Second, study the choice of combination theory internationally from horizontal perspective and clarify the superiority of entity theory.Finally, by analyzing to identify the deficiencies of new guidelines and point the combination theory of positioning, and future options, theoretical full selection-the entity theory, based on the above analysis, combined with our related applications environment of accounting standards, started with decision-making of stakeholders, the essence of combination, the requirements of modern enterprise system.The main innovation of this paper: firstly, the paper described various aspects of theory choice of the combination. Secondly, this article explores the consolidated theoretical issues from a new perspective, such as accounting objective. Finally, the paper analyzes the reality, expanding the future to point the future choice of combination theory, combined with the current situation and the trend of accounting standards.