Study On The Actualities Of Accounting For Business Combination In China

With the raise of business combination in China in recednt years,accounting of business combination has attracted the attention of scholars.The pooling of interest method is gradually cancelled and the purchase method is comprehensive used in the world,or the pooling of interest method is restricted to use.In this international background,in 2006 China issued enterprise accounting standard which has clearly put forward the business combinations under the same control using the equity method,non business combinations under the same control using purchase method. This practice caused a lot of controversy.The paper looks back the purchase method and pooling of interest method by their development history.It analyzes the problems of business combination accounting in the real application with examples in China. The result is that the pooling of interest method is more suitable for our country's situation. It finds that the purchase method and pooling of interest method has deficiencies in practical application. In response to these deficiencies, it gives suggestion in order to improve our business combination accounting standards.At the end of the paper, the author points out the problems in the accounting treatment of mergers and acquisitions,these problems include:fair value under the purchase method is not fair and the amortization of goodwill and impairment testing are not well ; it manipulates profits under the pooling of interest method and uses the sale of the combined assets of inflated corporate profits;it uses the sale of assets inflated corporate profits after the merger and so on.On the base of the analysis of issue,the author gives the advices of solution,such as standardized use of fair value and adjusted the scope of application by a purchase method and pooling of interest method.Then it indicates deficiencies: There isn't empirical research related to verification or depth study of new laws, etc. Finally, it prospects the future development trend of the standards of business combination accounting in China, in order to hope to promote the improvement of China's accounting standards and China's economic.