The Research For Accounting Treatment Of Business Combinations

Rational business combinations can promote the efficiency of the enterprisesignificantly, and it helps to strengthen the enterprise coordination ability, businesscombinations are used in commercial competition increasingly. Over the past twentyyears, as been an issue of common concern in accounting theory and practice in ourcountry, accounting for business combinations has caused great controversy andconcern. At present, the international has a total ban on the use of pooling of interestmethod, in the face of the trend of the accounting of business combinations, give fullconsideration to our own special economic environment, while converge with theinternational standards we also keep our own characteristics. The accounting standardsof enterprise in our country regulates that there are two kinds of accounting methods,they are acquisition method and pooling of interest method respectively. But in practice,based on the different understanding of the business combinations accounting entity andthe character of the economic business, using different accounting methods, there aredifferent effects on the enterprise which after merger, there also bring a lot of problemsof profit manipulation. Therefore how to select and improve the accounting methods ofbusiness combinations, has become the thorny problem of the accounting theory in ourcountry.In order to improve the application of the business combinations accountingmethods in our country, this paper has carried on the following work. Firstly, it adoptsliterature analysis method to research a large number of document literature to grasp theforefront dynamic of the field. Secondly, combining with the current situation of ourcountry, it introduces the theories of business combinations accounting methods andraises the problems that the two methods have produced in their applications bycontrastive analysis. Then, trough analyzing of the case to indicate and verify theproblem of profit manipulation, and think about how to solve the problem. Finally, itputs forward some suggestions in terms of refining the rule of standards and resolvingthe problem of profit manipulation. The main innovation in this thesis is pointing outthe problems under using of the two methods through analyzing large amounts of databefore and after the combinations, producing some targeted measures for each methodto improve the application of the method in our country. It has proposed to rule somerestricted deadline to limit to sell the asset after enterprise merger and add some conditions of using pooling of interest method to resolve the problem of profitmanipulation. To resolve the problem of profit manipulation by using the impairmenttesting of goodwill under the purchase method, it has suggested that the regulators couldissue some test reports, to strengthen the standardization of the impairment testing ofthe goodwill and reduce the number of profit manipulation cases. In addition, from theperspective of detailing the standards and completing the system of reporting theaccounting information, it has put forward some innovative suggestions to improve thequality of accounting information in the current situation.By consummating the application of the business combinations accountingmethods in our country, we can improve the reality and reliability of accountinginformation of business combinations effectively. Thus we can play the rule of businesscombinations to integrate economic resources and enhance the competitive advantagecompletely, to let it serve our marker economy more effectively.