Research On Consolidated Price Margin Caused By Business Combinations

Business Combination is one kind of complex and important transactions. The different accounting methods for business combinations will lead to dramatically different results in the measurement of assets, liabilities and equities. Along with the development of business combination actions, there rushed more and more accounting problems of business combinations. Though the history of business combinations and the corresponding accounting methods has been more than 100 years, today the accounting for the business combinations is still the controversial topic. Different people have different points in this field. In China, the accounting standards for the business combinations haven't been established. And there was no complete regulations or guidance to direct the practice. With the booming development of accounting combination actions in China, there are more and more requirements for the establishment of relative accounting standards. So doing some research on the accounting for business combinations will make some contributions to the establishment of relative standards. The field of business combinations contains many accounting problems, and this paper paid more attention on the "consolidated price margin", which was thought as the core accounting problem of this field. In this paper, first we introduced some basic concepts of business combinations and the history of combination actions. Next we compared the there accounting methods for business combinations and analyzed the limitations of pooling of interests method. And then we used the theory of recognition and measurement, assets valuation theory and the theory of fair value to discuss the accounting treatment for the composing parts of "consolidated price margin". In the last section, considering the status of accounting regulations for business combinations in China, we made some suggests on the accounting standards in this field in China.