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Research Of Accounting Standard On High-quality Consolidated Financial Statements

Posted on:2003-10-03Degree:MasterType:Thesis
Country:ChinaCandidate:Y Z QiuFull Text:PDF
GTID:2156360065950668Subject:Accounting
Abstract/Summary:PDF Full Text Request
China's entry into WTO indicates that our nation will be absorbed in the tidal wave of economical globalization and capital market internalization. Quantitative mega companies and multinational corporations are set up by kinds of combinations, especially equity-controlling combination. Correspondently, the importance of consolidated statement is highlighted.Since consolidated statement is well known in the world as one of the three most difficult problems in international accounting field, many accounting experts all over the world have made research on this issue, which results in fruitful accounting literatures. Meanwhile the consolidated statement standard in our nation still doesn't come into being. That's why our research should be based on international accounting standards and FAS(USA). Concretely, our research puts forward the significance of carrying out high-quality consolidated statement, referencing on the discussion of high-quality accounting standard in USA. According to a reasonable framework of consolidated statements, this paper discusses the methodology of consolidated statement, consolidation theory, consolidation scope and consolidation procedure, etc. which are concerned with big problems of consolidated statement.The thesis is divided into six chapters. The first chapter demonstrates three issues:(1) the great significance of establishing high-quality accounting standards;(2) what ishigh-quality accounting standards;(3)what problems should be solved concerning withsetting up high-quality standard. It's argued that our consolidated statement standardshould conform to such following features:(1) Concepts used in the standard should meet the requirements of financial accounting framework, thus to indicate the scientific aspect and strictness of standard.(2) Adequate care should be given to the reconciliation of relevance and faithfulness of accounting information.(3) Concerning that there are so many entities operating in different industries in a group, it's vitally important to disclose relevant information.(4) Language used in statements should be concise and easily be understood. (5) The quantity of alternative accounting methods should be reduced in order to promote theefficiency of capital market. (6) Implementing consolidation statement standard will make enterprises reflect economic reality.The second chapter introduces the methodology of consolidated statement. By comparing two methods of business combination from two aspects: decision usefulness and capital market internalization, we argue that purchase method is a more excellent way than pooling of interest.The third chapter introduces consolidation theory. To carry out high-quality standard, proper consolidation theory is indispensable. Research of consolidation theory is helpful to solve problems of recognition, measurement and disclosure of minority interests of consolidated statement. Consolidation theory involved in consolidated statement has following contents: proprietorship theory, entity theory and parent company theory. After an analysis of three above theories, we come to conclusion that (1) entity theory, which could strengthen the comparability of statement, is consistent with international customs. (2) Considering special equity structure of Chinese most listed companies, it's more necessary to protect the interests of minority equities from the institution. (3) The particular market environment decides that we can't adopt pure entity theory, but a mixture of different theories.Based on the requirement of high-quality accounting information, this paper provide comparative analysis among three common consolidation theories, then put forward suggestion on consolidation theory selection.The fourth chapter is about consolidation scope theory. The definition of parent company and subsidiary company is discussed. Consolidation scope relates to the issue of accounting entity. Generally speaking, companies should be consolidated into the statements as long as they control or be controlled. H...
Keywords/Search Tags:high-quality consolidated statement standard, consolidation methodology, consolidation theory, consolidation scope theory, consolidation procedure theory
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