Analysis Of Pre-IPO Financial Normalization Of Architectural Decoration Industry Company

With the rapid development of our country's economy,the speeding up of urbanization,China's sustained development of the real estate and construction,building decoration industry has shown the enormous development potential.However,accompanied by restricting the third set of mortgages,the issuing of purchase restrictions,the central bank's policy of raising the interest rate as well as increasing the interest rate of Housing Public Accumulation Funds Loan and other policies of regulating the property market,the current residential property has difficulty in taking a step,but the demand of architectural decoration in commercial real estate is still flourishing even under the circumstance of this new policy of macroeconomic control.In the meantime,as the deepen of marketization in architecture decoration industry,the degree of the openness in the market is becoming higher and higher,the competition among the companies is also getting more intensively.At present,the forms of enterprise organization in Chinese architectural decoration industry market consists of joint venture,joint-stock company,foreign capital and so on,shaping the situation of diversification.In 2006,Suzhou Gold Mantis Construction Decoration Co.,Ltd.has become the first company to be listed in Shenzhen Stock Exchange in architectural decoration industry.Then in 2015,seven architectural decoration companies,including Suzhou Kelida Building&Decoration Co.,Ltd.,Shanghai Trendzone Construction Decoration Group Co.,Ltd.,and Shenzhen Qixin Construction Group Co.,Ltd,have successfully landed on the capital market,and issued shares publicly.However,the number of listed companies in the whole industry only increases to 23 over the past decade from 2006 to 2015.Compared with other industries,it seems that there are more obstacles for architectural decoration companies to enter either Shenzhen or Shanghai Stock Exchange.There are two main reasons to explain this situation.On one hand,the development of architectural decoration industry has started relatively late,and in the early stage,China hasn't established a diversified and mature capital market to satisfy the financing demands of companies of different sizes.On the other hand,the lack of standardization in self-management,internal control and accounting calculation prevents companies from meeting the requirements to issue shares and bonds in public market.For those companies that satisfy listing requirements,the standardization and compliance of accounting calculation,and the establishment and implementation of internal control,are the key points in financial censorship for IPO stage.According to the author's practical experience in financial normalization of several companies in architectural decoration industry,this article follows a structure to introduce,analyze and solve the problems.Taking RDK Company as an example,this article points out the existing problems in accounting calculation and internal control in pre-IPO companies,and elaborates the reasons that cause the problems.Then based on the theories of accounting calculation and internal control,the author applies his own practical experience to provide solutions in terms of entity qualification,accounting calculation,internal control system and other issues for RDK Company's pre-IPO financial normalization.Finally,from the perspective of enterprise management,the author provides safeguard measures to satisfy the demand of IPO financial normalization.