The Study On Accounting Issues Of Reverse Merge In China

With the development of the capital market, the financing needs of the growing, reverse merge emerges. Reverse merge, also called reverse takeover or backdoor listing, it refers to whether the listing Corporation is a net shell or non a net shell, the final result is the control of the listing Corporation has become shareholders of the non-listed company, the listing Corporation’s controlling shareholder, the realization of indirect listing. As a kind of special enterprise merger, counter purchase broaden the financing of enterprises, as enterprises listed. Compared to IPO, counter purchase of low cost, short cycle, easy to successfully listed and many other advantages. At the same time, China’s IPO several times and the closing of the listing of new shares to review more stringent situation, more and more enterprises choose the reverse takeover. In2008, China’s accounting standards for the first time on the counter purchase of the specification, and after that it’s continuously revised. However, as so far, counter purchase aspects of the system is still not perfect, causing reverse purchase accounting treatment not standard, not unified, even not reflect the true essence of transaction. This will be easy to threaten the stability of the capital market, damage the interests of investors. Improve the reverse purchase as soon as possible accounting standards, to standardize the reverse purchase transactions, ensure the normal, orderly operation of the capital market, plays an important role in safeguarding the interests of investors.A total of six part of this paper, the first part is the introduction, including three aspects:the back ground, research significance, research methods and ideas of this research, and from the two aspects of domestic and abroad, introduces the research status of the development and the current counter purchase. The second partis the theory of reverse acquisitions, including the concept of reverse merge definition, counter purchase the implementation steps and various patterns, and listed on the reverse purchase and IPO are compared. The third part introduces the accounting treatment of provisions of the purchase of the current reverse in china. The fourth, five and six part find counter purchase in the presence of the current practical problems through the analysis of a case, and make some suggestions about how to reflect the reverse merge better. The sixth part is the conclusion of this paper and as well as its weakness.