Research On Asset Assessment Of Merges And Acquisition Of State-Owned Enterprises

Reform of Chinese state-owned enterprises has made a rapid progress these years; M&A(mergers and acquisitions) cases happened to state-owned enterprises have been increasing.News released in papers show that they might be merged by other state-owned enterprises,by foreign-funded enterprises,or by individually-run enterprises.How to evaluate the value of state-owned enterprises objectively is key problem,hence value evaluation is the most import role of M&A performance.Value evaluation in the process of M&A of state-owned enterprises means evaluation of state assets,which is not only related to the enterprises benefits,but also to the state benefits. Based on the cases author has dealed with,different evaluation results will be achieved if different evaluation method is employed,which results in different assets evaluation for the same enterprise.In this paper,different evaluation approach are studied theoretically,principle and application scope are also described.Cost approach and income approach are specially analyzed on the theory model and parameters selection in the practical application.Advantages and drawbacks of these two approaches are also concluded when they are used on assets valuation in M&A of state-owned enterprises. A typical case is analyzed in the paper with cost approach and income approach respectively.From comparison of the results,persons involved in the M&A cases and estate evaluator should be notified that income approach is more appropriate to evaluate an enterprise at current marketing environment.