China Consolidated Specification Problems And Countermeasures

Presently, the current rules on preparing consolidated financial statements is consolidated financial statements provisional regulation> enacted in 1995. With the development of social economy, consolidated financial statements' theory and practice have been improved step by step, consolidated financial statements provisional regulation> can not adapt the requirement of the economy development. In this paper, by investigating and referring, we find the problems existing in and provide relevant suggestions.This paper consists of five sections. The first section mainly describes the author's study process and study means. By investigating and referring, the paper focuses on the following three problems: the selection of the consolidation theory, the elimination of the impairment and the disposal consolidation difference.The second section summarizes the consolidation financial statements. Firstly, we illustrate the motivation of consolidation financial statements' emergence and development. In additional, this section also deals with the consolidation financial statements' result and characteristic. Finally, the author discusses the necessity of setting up perfect consolidation financial statements rules.The third section deals with the select of the consolidation theory. Firstly, the author explains the proprietor theory, the entity theory and the parent company theory, and then, compares the above theories. Finally, by considering the situation of our country and the international tradition of the consolidated financial statements, the author thinks we should select the entity theory as the theory base of preparing the consolidated financial statements.The fourth section deals with the elimination of the impairment of internal transaction assets. As to how to eliminate the impairment, consolidated financial statements provisional regulation> does not give concert guidance. In this paper, the author illustrates the elimination of the impairment by giving two examples.The fifth section mainly discusses how to deal with the consolidation difference. In our consolidated financial statements, the consolidation difference is too obscure and is not amortized. The above means is not correct. So, the author thinks we should reconsider the content of the consolidation financial statements and amortize the consolidation difference.