A Study On The System Of Preferred Stock And Its Economic Consequences ——A Case Study Of Xiaomi Group

With the continuous development of the capital market,the traditional ways of raising funds,such as debt borrowing,issuing bonds and stocks,have been unable to meet the needs of enterprises for funds.As a new type of financing tool,preferred stock emerged and gradually entered the capital market of our country.At the same time,with the advantages of not having to repay,being able to preferentially enjoy the right to distribute the company's assets and profits,and not dispersing the company's control right,more and more enterprises use preferred shares for financing.After a long time of capital markets development in Europe,America and other countries have entered a mature stage with sound systems.And it has mature market mechanism and investor protection mechanism.There are more than 700 US listed companies issuing preferred shares,and many Internet giants in China have also listed in the US by issuing preferred shares.Preferred stock has developed for more than one hundred years in Europe and America.It is a mature investment and financing tool.China's preferred stock development is relatively late.In 2014,the pilot program of preferred stock began to be implemented and developed rapidly in China.A dozen commercial banks have submitted plans for the issuance of preferred shares to expand financing channels.However,China's capital market is not mature,the development of the relevant theory and system of preferred stock is not perfect,and small and medium-sized enterprises can not be the main issuer.In addition,ve institutions can only inject funds into enterprises that build vie structure,issue preferred shares for financing,and then go to Hong Kong and other capital markets for listing,unable to provide funds for small and medium-sized start-ups.At present,more than 40 listed companies in Shanghai and Shenzhen have issued preferred shares,but the accounting treatment of preferred shares is still controversial.The dual attributes of preferred shares make it difficult to divide them,especially for the division of liabilities and equity in "redeemable convertible" preferred shares.IFRS and GAAP have different treatment for this,so their accounting treatment and its impact on profit and loss are of research significance.Based on the background of the issuance of preferred shares at home and abroad,this paper studies the financing of preferred shares,and focuses on the analysis of the accounting issues and impact of redeemable convertible preferred shares.Through literature and data analysis,this paper compares the capital market and the structure of preferred stock system in China and the United States,and discusses the reasons for the slow development of preferred stock in China.At the same time,the paper analyzes the motivation,influence and function of Xiaomi group's issuing preferred stock from three aspects of financing demand,control right and IPO demand.At the same time,combining with the valuation of preferred stock,this paper analyzes the accounting treatment of Xiaomi special preferred stock and the impact of its changes in fair value on profit and loss,and puts forward suggestions from accounting treatment,information disclosure,capital market and other three aspects.