An Analysis Of Accounting Treatment Methods For Business Mergers Under The Same Control

Since the end of the 19 th century,western countries have set off many waves of business mergers,two accounting methods for corporate mergers appeared: the pooling method and the purchasing method.Based on accounting rent-seeking theory and economic consequences theory,we can see that the economic consequences of the purchasing method and the pooling method are different.Major shareholders or corporate management authorities may choose the pooling method for self-interest,or even design activities that comply with the pooling method out of nothing,resulting in the abuse of the pooling method.In order to avoid the abuse of the pooling method,the Financial Accounting Standards Board adopted the purchasing method as the sole accounting treatment method for corporate mergers.Subsequently,the International Accounting Standards Committee also cancelled the pooling method.In this case,China Accounting Standards still retain the pooling method,it is clearly pointed out that business combinations under the same control use the similar pooling method for accounting treatment.However,the use of the pooling method has been controversial due to the shortcomings of not only inducing enterprises to conduct profit manipulation but also not conducive to the reasonable allocation of resources and international standards.This article takes the cases of multiple business mergers under the same control conducted by Bright Dairy Co.,Ltd.in the second half of 2018 as an example,focusing on the analysis of the accounting treatment methods for business mergers under the same control.First of all,this article uses visual data,charts and other forms to compare and organize the business combinations under the same control,and analyzes the merger motivation and consideration of the business combination under the same control.The generation of the merger and the high price of the merger have a certain relationship with the current accounting treatment method of the business combination under the same control;Secondly,this paper simulates the accounting treatment of the purchasing method and compares it with the pooling method,indicating that different accounting treatment methods have different impacts.The analysis believes that the purchasing method is more in line with the needs of most information users and is more conducive to protecting their interests.The improvement of the accounting treatment method for business combinations under the same control should refer to the purchasing method.Finally,this article puts forward rationalization suggestions based on the current problems of business combinations under the same control,especially,this article puts forward new optimization suggestions for the accounting treatment method of business combinations under the same control relying on international research and the purchasing method.The new suggestion is using fair value to measure assets and liabilities,and the part that the merger consideration exceeds the fair value of the business affects profit and loss,and the part that the merger consideration is lower than the fair value of the business adjusts the owner's equity,at the same time,the part that the fair value of the business exceeds the net assets is included in consolidated goodwill,the part that the fair value of the business is lower than the net assets affects the current profit and loss.In addition,in order to give full play to the advantages of the new accounting treatment method of business combination under the same control,this article also proposes related supporting measures such as perfecting the information disclosure system and increasing punishment.It is hoped that it can help provide more relevant accounting information to meet the information needs of most users of the consolidated financial statements.The innovation of this article is that this article combined with the case of Bright Dairy to comprehensively analyze and sort out the applicability of business combination accounting treatment methods under the same control,and proposed new suggestion about the accounting treatment methods for business mergers under the same control.The data needs to be estimated,but it will not affect the reliability of the paper.