Study On Consolidated Accounting Treatment Method Of Friendship Shares

In recent years, the business combination is the hottest topic of the capital market. With thedevelopment of global economic integration, the wave of corporate merger is also expanding. Businesscombination brings out a few advantages. Firstly, it could inject fresh blood for enterprises, and at thesame time it brings the scale benefits which is good for the integration of advantageous resources.Secondly, it helps a lot to achieve the optimal allocation of resources. Thirdly, it improves the ability ofmanagement and profitability, thereby which contributes to the sustainable development of enterprises,and to achieve the strategic goals of the enterprise.As to the business combination, the choice of the method of accounting for business combinationis the core problem. Different accounting methods will bring different economic consequences. Atpresent, the purchasing method is popularly used in the world. However, according to the complexeconomic circumstances in our country, there still maintains the coexistence of the purchasing methodand the equity method for different enterprises in different economic matters. Thus, this has resulted inthe flexibility to choose the accounting method, and generally, the enterprises would choose the methodwhich is good for their own benefit. In despite of the accounting laws and regulations, some companiescan still find the "grey area" to make the black-box operations.The content of this article is mainly divided into five parts. First of all,the thesis mainlyintroduces the research background and gives some statements about the research results of scholars athome and abroad in two areas, namely the choice of accounting methods and the profit of enterprisemerge. The second part is about the relative concepts and theoretical basis. The third part is tointroduce the problems which exits in the choice of the enterprise merge accounting methods.Thefourth part takes the Friendship’s merger of Bailian share as a case. Combined with the theoreticalknowledge in the second part, it analyzes the financial data for each quarter under two kinds ofaccounting methods, and it compares the differences and effects of different accounting methods, andthen it further analyzes the possible means of profit manipulation. In the last part, it aimed at summarizing the problems in the case, and putting forward research prospect.