The Feasibility Analysis And Construction Of The Fresh-start Method Used In China

With the increasing prosperity of Chinese merger & acquisition market and the fast development of Chinese stock market, an increasing number of companies set their feet on .business combinations. At present, The M&A management policies is increasingly perfect in China and the forms of M&A is innovative, which offer more alternatives for listed companies. Hence, Stock replacement on M&A is popular with business combinations with large scales. However, the methods of accounting for stock replacement is still not available in Chinese accounting standards. In fact, Stock replacement is only a mode of payment, which asks us not to use one single method to do it. Consideration should be given to economic substance of transactions. Up to now, the stock replacements carried out by listed companies indicate that all of firms adopt the pooling-of-interests method. Moreover, greater focus of research in China has far been placed either on the alternative between the purchase method and the pooling method, or on comparison of inferiority. while less attention has been paid to the new method of accounting, that is fresh-start method. The research into it is restricted within the basic introduction and simple comparison. We can't find out the substantial conclusions about it. During the long history of M&A, the purchase method has been accepted and broadly applied in the combination with buying quality. The people all focus their mind on accounting treatment in M&A with the pooling-of-equity interest. According to its significance in both theory and practice, this paper focuses the discussion on the new way-fresh-start method.This thesis is based on the fifteen cases of stock replacement in China, analyses the limitations of the pooling-of-interests method, and discuss the feasibility of fresh-start method through making a study of the essential of"pooling-of-equity interest"and application of fair value. By referring to some related quintessential accounting standards from the western developed countries, Furthermore, the paper...