Research Of The Pooling Of Interests Method On Business Combinations Under Common Control

The accounting treatment of business combinations under common control has been a controversial topic in the theoretical and practical fields both at home and abroad.In 2004,the international accounting standards and the United States accounting standards in 2001,respectively,business combinations under common control and the pooling of interests method excluded from the text of the guidelines.In 2006,China's Ministry of Finance issued the "accounting standards for business combination No.20"(CAS 20)in the provisions of business combination according to whether the two sides belong to common control is divided into two types,using different accounting methods respectively.The accounting treatment of business combinations not under common control is basically the same as the international accounting standards,while the business combinations under common control adopts the pooling of interests method.In 2008 and 2007,IFRS 3 and FAS 141 were revised and implemented.The relevant issues under common control were not included in the above documents.Other major countries in the world have also restricted the application of the pooling of interests method to varying degrees.In such an international context,China's business combination standards are still relatively large,the scope of the retention of the " pooling of interests method ",and in the capital market has been widely used.In the 2016 meeting of the international accounting standards board(IASB)on the subject of business combinations under common control,the underlying issues remained virtually unchanged.Therefore,it is worth exploring and studying that the reasons for the pooling of interests method and the existing improvements in the practical application.Based on the related concepts and theories,this paper analyzes and evaluates accounting methods of business combinations under common control,and reviews the development history and present situation of the United States and other countries as well as in China.To explore the rationality of the pooling of interests method in China,combined with specific cases to summarize the problems exposed in practice.By explaining the understanding of the commercial essence of the business combination under common control,the conclusion is drawn that the choice of the pooling of interests method in China is reasonable and completely abolished is undesirable.At the present stage,the scope and application of the pooling of interests method in China's business combination is an imperfect place.This paper attempts to redefine the scope of application of the pooling of interests method in China.For the business combination under common control,it has commercial substance,adopts the purchase method and no longer adopts the pooling of interests method.For those who do not have commercial substance,still use pooling of interests method.And provide some references and reasons for whether the combination has a commercial substance.In addition,the article put forward a few other suggestions: improve the provisions of the accounting treatment of the pooling of interests method,such as the adjustment of the disposal of subsidiaries under common control,it should be based on the same criteria to determine whether the combination has commercial substance,if there is no commercial substance,do not confirm the profit and loss;Strict audit business combinations under common control after a short time of external disposal of subsidiaries,and can be in accordance with the provisions of the various asset classes are asset sales limits,to reduce the combined short-term sale of value-added assets bring profit manipulation;abolish the regulations that consolidated financial statements of the comparative data must be retrospectively stated;The disclosure of transaction pricing information and accounting methods should be strengthened so as to improve the usefulness of information.