Research On The Accounting For Business Combination Under The Same Control In Our Country

When business combination has become a means of rapid expansion for company, it is also active in our country. However, for this important means of capital operation, how accountant should carry on the accounting treatment of this transactions or events to allow it to be a true record, promote the development of capital market, rather than disturb capital market. Unfortunately, pooling of interest method or the purchase method, which should be used for business combination is still a puzzle all over the world.Finally, the U.S. Accounting Standards in2001abolished the pooling of interest method, all business combinations using the purchase method. Subsequently, the International Accounting Standards in2004followed the practice of the United States, as long as business combinations within the scope of guidelines; it should use the purchase method. From this point, the pooling of interest method seems to exit the stage of history. But Chinese Financial Accounting Standards issued by Finance Ministry in2006distinguishing business combination in business under same control and non-same control. Standards require business combination under non-same control record the acquired assets and liabilities at fair value which similar to the purchase method, and business combination under same control record the acquired assets and liabilities at book value, and as if the reporting entity formed after the merger implemented has been in existence since the ultimate controlling party control, which similar to the pooling of interest method.This standard has aroused heated debate among accounting experts. Some of them are critical of this practice, and they think our standards should be convergence with International Accounting Standards. That is all business combinations use the purchase method, and abolishing the pooling of interest method. But some of them approve it. They think of the pooling of interest method in line with our current national conditions. Chinese Financial Accounting Standards should first meet the development of our market, rather than blindly follow the international practice. And now, this dispute has not been resolved.Then, six years since the implementation of new accounting standards, how the standards are applied in practice and what is the problem in the application. Few people make a statistical and research to solve these problems. In order to explain the above problems, this paper based in theoretical knowledge about the business combination, to all listed companies as the research object, statistical analysis of the practical application of business combination accounting standards, as well as the financial impact from accounting treatment for business combination under the same control. Combined with specific cases to illustrate what is the problem of accounting treatment for business combination under the same control in practice. And finally make recommendations for these problems.Research methods used in this paper are normative research, statistical analysis and case studies. Innovation of this paper lies in conducting a statistical analysis for the use of accounting treatment for business combination under the same control, and pointing out the problems. These provide evidence and theoretical basis for standard setters.