Accounting For Business Combinations

Accountant methods of business combination have been the most important and one of most controversial domains in the accounting theory and the practical realm, and the implementation of business combination accounting standards also received the high attention. In order to improve the quality of business combination accountant processes and realize hastening international processes, in 2001 the International Accounting Standards Board (IASB) with the American Finance Standards Board (FASB) decided to solve the problem of business combination accountant processes together. In order to enhance the commensurability, and reduce the choice of methods with the identical accounting event, FASB and IASB officially cancelled the Pooling of interests method. in 2001 and 2004 separately, only to be able to use the purchase method in all business combinations.In order to adapt the development of our country market economy and accelerate our country economy to integrate with globalization, on February 15,2006, the Ministry of Finance had issued officially "Business accounting standards NO.20- Business combination". The standards divide the business combination into the business combination under the identical control and the business combination under the non-identical control. The business combination under the identical control uses the Pooling of interests method, and the business combination under the non-identical control uses the purchase method. The new criterion not only hastens the simultaneity with international standards, but also retains our own character. Although the new criterion makes the considerable progress, but there still have many aspects needed to consummate. This is the main purpose of this article。This article uses traditional standard method to do research, and makes a comprehensive and in-depth study on the theory and application of the business combination. The article first used the induction method to review and summarize the literature related to the business combination and analyze the concept of business combination, finally given the definition of business combination in this article. Then this article uses the historical review method to review the development of business combination criterion of international accounting standards and the American Accounting standards, and clears the newest business combination accountant processes in international accounting standards and the American accounting standards.The next this article in detail reviewed our country the criterion related to business combination. It fully analyzes the present situation and the application of our business combination accounting standards.It proposed that our country should fully use the reference and the valuable experience, and also needed to fully consider the fundamental realities of our country. This article points out the future development direction of our country business combination accounting standards.Through the above research, this article puts forward the improvement proposal of our business combination accounting standards. The suggestions are establishing examination system of identical control, give impotent to combination substance, establishing the using environment and the using direction of fair value, developing goodwill depreciation technology, and strengthen the disclose of information.