Research On Reverse Merger Related Accounting Problems

In recent years, domestic enterprises grow quickly, and their financing demands are also rising. Because of the limitations of current financial market and banking system, private enterprise financing activities are highly restricted, which makes it hard to meet the need of development and expansion. Thus, a large number of enterprises turned to public financing. However, direct IPO has features of high threshold, high cost, long cycle, and they keep away many small and medium-sized enterprises. Therefore, reverse merger, also called "backdoor listing", with its short cycle, successful security, relatively low cost, has more and more caused the attention of people. So accounting related to reverse merger is becoming a hot topic.U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) ruled problems related to reverse merger earlier, released application guidelines, and made accounting and consolidated financial statements of reverse merger rule-based. But international accounting standards only provide specific provisions for enterprises constitute a business, when the to-buy enterprise does not constitute a business, it is excluded from the scope of enterprise merger and its accounting treatment is not defined.Our country has not formed a complete theoretical framework on reverse merger. On accounting, reverse merge is just involved, but not detailed specific, in Notice on Handing in 2008 Annual Report of Implementing Accounting Standards, No.60 published by Ministry of Finance, Answer to the Disposal of Accounting on Indirect Publicizing by Purchasing Listed Companies by Non-listed Companies, No.17 published by Ministry of Finance, and Explanation on Company Accounting Standard 2010. But in practice, the number of enterprises conducting reverse merger is increasing. These enterprises put forward a series of new problems in accounting. The lack of accounting policy, often leads to enterprise consolidated financial information incomparable, even information distortion, which will in the enormous degree damage the interests of investors and eventually affect China's capital market. Therefore, it is urgent to eliminate (?)cnformity in accounting on reverse merger and enhance comparability of consolidated accounting information.This thesis will take accounting problems related to reverse merger as the research object, "ST Haixing" reconstruction case as the breakthrough point, to explore the rationality of existing standards, put forward problems met in practice, and provide suggestions to solve the related accounting problems. Believe that study on the field of reverse merger has important theoretical and realistic significance.This thesis is divided into six parts, concluding:PartⅠ, introduction. It briefly described the research background, topic selection significance, literature review and the content and method of the research.PartⅡ, theory on reverse merger. By explaining the concept of reverse merger, main problems in accounting recognition and measurement are brought forward. It also introduces accounting standards conducted by FASB, IASB and our country, compares and analyzes their similarities and differences in accounting treatment.PartⅢ, case study. By introducing the "ST Haixing" reconstruction case, the problems need to be discussed are brought forward.PartⅣ, further analysis. In case study basis, it conducts further thinking on accounting problems and points out other representative issues in reverse merger.PartⅤ, suggestions on related problems. According to the above problems, necessity of developing accounting theory is pointed out, and suggestions to solve the respective problems in reverse merger are brought out.PartⅥ, conclusion. It points out the rationality of China's current accounting standards, and reverse merger accounting theory and practice should be perfected on the basis of guarantee execution, to make treatment on relevant issues legalization and standardization.