On The Economic Consequences Of Corporate Merger Accounting Treatment Research

Corporate merger has been one of the topics of concern. Investors'Financial report is the main basis for forecasting and evaluating the effects of the merger. And the different accounting methods produce different accounting information, resulting in the distribution of interests in the results of different interest groups. Thus affecting the efficiency and effectiveness of the allocation of social resources that have economic consequences. Based on theoretical analysis of the economic consequences of the merger accounting treatment. Coming to the merger and absorption of TCL Group as an example, compare the purchase and pooling of interest method of the financial situation, operating results and main financial targets, the different accounting treatment of the economic consequences. China has promulgated on the basis of the norms of corporate merger pooling of interest method allows for a reasonable analysis also put forward their suggestions.A total of text is divided into five parts. The first part outlines the economic consequences of the basic theory, first of all, the economic consequences and the meaning of "agent theory." Second, the economic consequences of Positive Accounting Theory as a branch of the accounting procedures abstract Positive Accounting Theory, The three proposed the hypothesis that the Premium Plan hypothesis, the hypothesis lease obligations, the political cost hypothesis consequences for the economy of a powerful explanation.The second part of the accounting treatment of a corporate merger study. First, the accounting treatment of business combinations that the meaning of the purchase and pooling of interest method, and features a brief introduction; Secondly, a comparative analysis of the difference between the two, including the following : the purchase and pooling of interest method of theoretical assumptions, two main qualitative characteristics of accounting information and the different impacts of the merger of the different statements, The differential impact of the merger statements which include : the impact of the merger business year。The two explained the different effects on the financial statements, including:the impact of the merger of the business year. If mergers in the accounting year, it was a joint enterprise with profit before the merger. rights under the law in connection with the preparation of the combined enterprise profit report prepared under the purchase method profit will exceed the combined profits of enterprises; After the merger of the operating results of the impact of the purchase method of the annual profits of less than rights and profits under the law; The balance sheet impact of the merger, assets after the merger under the purchase method is usually higher than the rights and interests; the impact on financial ratios, in the purchase of assets and liabilities under the Act and the net rate of return below the rate of interest method.And the flow rate is higher than interest method; the impact on earnings per share less than earnings per share purchase rights under the law binding. Finally, we talk about the advantages and disadvantages of the two methods. Through this chapter of the different accounting treatment with a view to the economic consequences of lay the foundation.The third part of foreign countries on the economic consequences of corporate merger accounting treatment research. First, study abroad, mainly divided into two categories: The accounting treatment of mergers there is no difference in impact on the enterprise value; the accounting treatment of business combinations that vary impact on enterprise value. Secondly, For corporate merger accounting treatment resulting from the economic consequences of major enterprises to both investors and corporate managers elaborate;from the enterprise management,enterprise management staff of the economic interests will be directly affected. Especially when the proceeds paid directly linked with the report, in other words, If the management of enterprises and the remuneration report directly linked to income, the higher the earnings report. Their remuneration calculated on the base of the greater because of the huge interest method can produce "immediate return". Management can receive more rights and the interests of law; the other hand, The management staff will also be affected by such social standing can enhance performance, it will have a sense of achievement; investors from enterprises of different accounting methods may affect investors to evaluate the value of the enterprise, while accounting methods may affect the bargaining transactions, the rights and the law can be brought in a higher reported income. This may make the acquisition side to change to meet the Amalgamation for the acquisition using the pooling of interest method restrictions.Section IV deals with the accounting treatment of Chinese enterprises on the economic consequences of research. First, the accounting treatment of mergers in China whether the economy. major financing and regulatory environment in light of China's specific analysis; from the financing environment, for example, listed companies, financing channels, including debt financing and equity financing, debt financing and equity financing of the analysis, we can see that corporate merger with the economic consequences of the choice of accounting methods; From the regulatory environment, in accordance with the relevant provisions of the China Securities Regulatory Commission. Listed companies suffered losses for two consecutive years; its shares will be special treatment (ST). Three consecutive years of losses, its shares will stop trading (stock market), in order to avoid a delisting. During the corporate merger will choose a method to achieve their aims, therefore, in such circumstances, the accounting treatment of business combinations also has economic consequences. Secondly, case analysis, Amalgamation Share TCL Group combined with our accounting treatment of the cases to prove economic consequences. Mainly two aspects: using different accounting treatment of the balance sheet, Profit and major financial indicators (earnings per share. and the net rate of return on net assets per share), as well as learn from the study include an analysis of the economic consequences of corporate governance The group of investors and analysis, which can show in a specific environment, accounting treatment of business combinations have economic consequences.Section V describes the rights and the law in a reasonable analysis and countermeasures. First, the interests of our existence is reasonable in light of the analysis, including analysis of the following areas: environment, theoretical and practical foundation, based on the practical and operational base; Secondly, the proposals and solutions Although allows pooling of interest method, but because of the potential adverse economic consequences of its decision to side. To prevent the use of corporate merger will help investors make decisions not, in my view from the outside environment. Three aspects: the enterprise's management and investors from the external environment. To prevent the use of interest method of defects for profit manipulation. Should strictly limit its application conditions and the supervision mechanism into full play the role of constraint; on the management of enterprises, and the reasons for using the pooling of interest method to deal with the difference between the purchase method disclosure forms; for enterprise investors. Should not only focus on information provided by the accounting reports, attention should also be used in accounting treatment of business combinations. This will help make their investment decisions.Through the above five parts, the main purpose of corporate merger accounting treatment on the basis of the economic consequences. China's newly promulgated corporate merger guidelines changed, and also our rights and in the reasons for the exposition the same proposal and measures with a view to facilitating the development and improvement of standards, which is where this novel. However, in this paper, there are some shortcomings, the main problems :In its analysis of our consolidated accounting treatment methods have economic consequences, mainly from the stock market environment and managers pay for the analysis, and analysis is the size of enterprises, The financial leverage of its effectiveness; At the same time, with TCL case analysis, no analysis of Interests Act TCL links to the original flow of Shareholders and creditors of the paper is less than one.