Study On Accounting Treatment Of Performance Compensation In Mergers And Acquisition

As an effective means to maximize the value of enterprises and create sustainable competitiveness,M & A is favored by increasing number of enterprises,and its program designs are becoming more and more diverse.The performance compensation can not only cover information asymmetry between the two sides of the transaction and weaken the negative effect of information asymmetry,but also can effectively promote enthusiasm of improving enterprise performance of the committed party.The number and amount of performance compensation agreements signed by listed companies increase year by year.At the same time,in recent years,the incomplete rate of performance compensation has been significantly increased,from 2010 to 2015,the numbers of incomplete performance compensation were respectively 0,1,14,33,and 107.Whether the performance compensation should be confirmed in M & A,how to deal with the performance compensation triggered by substandard performance in accounting,there is no clear provisions of current accounting standards.Listed companies have different accounting treatments to performance compensation,and there are also many problems in the disclosure of public information,therefore,it is urgent to solve these problems of accounting treatments.So this paper makes an in-depth study on the issue of performance compensation.First,the essay described accounting treatment of performance compensation due to the frequent incident of substandard performance,thus drawing forth the research background and significance of the essay.The essay made clear of the existing problems in the current accounting treatment while clearing up and reviewing literatures at home and abroad,introduced the research methods and frame of the essay,and pointed put the shortcomings and innovative points of the essay.Then,the essay had a detailed introduction to the development history and implementation situation of performance compensation and explored motives of listed companies adopting performance compensation according to the definition and component of performance compensation.Furthermore,the essay discussed relevant regulations of IFRS and CAS on accounting treatment of performance compensation and analyzed initial affirmation on purchase date,subsequent measurement after purchase date and information disclosure of performance compensation in accordance with the relevant regulations of CAS.In the end,the essay discussed the current situation of the accounting treatment of performance compensation in the current market,selected the representative case that Gosuncn Technology Group Co.,Ltd purchased Chongqing Xunmei,introduced the background,the clause of performance compensation and accounting treatment of performance compensation,and analyzed the rationality of accounting treatment.Moreover,the essay compared and analyzed differences of accounting treatment with contingent asset or contingent consideration,motivations of the two handling methods and influence on financial statements and market participants,and commented the case.In the end of the essay,the author summarized the whole article and put forward suggestions to accounting policies and supervision organizations.