| Although the investment banks in China, as a product of the development of securities market, is now more than 10 years old, they have not functioned as they should have .The major part of Chinese investment banks, namely, securities companies (Chinese securities companies are not investment banks in strict sense) work mainly as underwriters on the primary market and brokers on the secondary market. With the economic environment for investment banks changing and stock market gradually being perfected, the traditional business for investment banks is getting fierce day by day The investment banks are facing the existing pressure and their operation is put in a tight spot The investment banks in western countries take great pains to cultivate and explore new businesses owing to the keen competition at that time. Therefore, our investment banks are at a turning point and they are badly in need of exploring innovating business and making a breakthrough to increase its profitability.In western investment banks, the mergers and acquisitions (M&A) business is regarded as the "golden milk cow" for its high rate of return with low risk. Investment banks have a perfect combination of consultants on M&A operation, scheme on financing and reorganizing of company to dispose resource reasonably .It embodies the investment banks' intermediary function. What's more, M&A business has a positive relationship with other businesses and brings along their profit increasing .So M&A business is the core business in investment banks and is regarded as the "advanced financial project combining financial resources and intelligence" .M&A business explores investment banks' expanding developing space, so getting involved in M&A is the inexorable trend for Chinese investment banks.At present, M&A business in China is still in the rudimentary stage .On one hand, investment banks haven't got involved in M&A activities fully ;on the other hand, its yield rate is very low .It hasinadequate staff and disposition in this business setup .The strategic reorganization of our national economy at hand and the issue of laws and regulations on M&A in succession provide our investment banks favorable circumstances.So it is more important and necessary for our investment banks core competence to explore the M&A business and to increase its' profitability.To increase the profitability of investment banks is a compound subject, which includes many aspects. This dissertation just gains a foothold on the Accounting standpoint. Based on the various reasons to explain for Chinese investment banks M&A business not functioning fully, this dissertation probes the development trend and operation way apart from the basic business procedures and experience of western investment banks and discusses the micro aspects of M&A business, such as decreasing cost, increasing profit. Besides that, in view of the fact that there is no accounting laws and regulations on M&A business at present, this dissertation explores into the accounting treatment on M&A business based on analyzing its feature. With our investment banks pay much more attention on the M&A business, the studying of this article must be providing benefits. |
