Mergers And Acquisitions Of Goodwill Accounting Research

Since the 1990's, global business combinations increased sharply. Mergers and Acquisitions lead to great combination goodwill. More and more capital are paid for goodwill. It's necessary to focus on how to regulate combination goodwill. To today, in accounting field there is much different viewpoint on combination goodwill, such as, the substance of combination goodwill, the recognition of combination goodwill, the measurement of combination goodwill, the record of combination goodwill, the disclosure of combination goodwill. With the more opened policy adopted in Mainland China, merger and acquisitions have been increasingly active, and we must face the problems of combination goodwill. Though there are relatively complete 'business combination theories' and 'consistent regulation on goodwill' in western countries, The author selects combination goodwill as theme, in order to, by researching the basic theory and relative regulation of combination goodwill, adequately define combination goodwill, correctly regulate its accounting treatment, and preferably conduct accounting practice.Based on narrow sense of merger and acquisitions and essence of combination goodwill (negative goodwill), the dissertation probes the recognition of combination goodwill, the measurement of combination goodwill, the record of combination goodwill, the disclosure of combination goodwill, and consider problem of combination goodwill in China. Section one: This section is the theme' basic. In this section, the author clarifies the definition of Merger and Acquisitions by analyzing a few of similar conceptions: merger, acquisition, consolidates. That is "merger and acquisitions" refers to that an independent company acquire the operational control right of one company or several companies in stock market. This definition is narrow sense. The essence of merger andacquisitions is transaction of property right. So the accounting approach of merger and acquisitions only is purchased method. Because accounting treatment on combination goodwill is very important, we have to research combination goodwill.Section two: In this section, the author defines combination goodwill by probing goodwill all over again. Firstly, the author take for that "excess earnings concept" embodies the substance of goodwill by analyzing "master valuation account concept", "valuation of favorable attitudes toward the firm concept" and "excess earnings concept". Secondly, analyze combination goodwill. Combination goodwill is goodwill too, but it issues from merger and acquisitions. The excess of the purchasing price over the fair value of the net assets is regarded as combination goodwill in many countries' regulations, but this is not accurate. By analyzing the cause of price difference, we can draw a conclusion: The excess of the purchasing price over the fair value of the net assets is not all combination goodwill, and combination goodwill refers to current value of excess earnings the purchased company's net assets can bring. In the merger and acquisitions, it is the excess of the current value of cash flow over the fair value of net assets.Section three: This section is the article's emphasis. In third section, the author discussed the recognition of combination goodwill, the measurement of combination goodwill, the record of combination goodwill and the disclosure of combination goodwill. Firstly, by appraising a few existing methods, the author points out: recognizing the excess of the purchasing price over the fair value of the net assets as an asset is the shortcoming of these methods. The correct recognition is to divide the excess into two parts; the excess of the current value of cash flow over the fair value of net assets is recognized as an asset and the other is recognized as an expense. Secondly, the measurement of combination goodwill is discussed. There are two means to measure thecombination goodwill: direct means and indirect means. By being compared, the direct means is regarded appropriate because it accords with...