Research On The Information Disclosure Of Consolidated Statements And Parent Statements

Motivated by the growing significance of the world’s economies, the rapid expansions of the company size achieved by merger and acquisition are gradually widespread. Subsequently, more and more listed companies began to disclose their consolidated statements which replace the parent statements as the focus of investors, regulators and the management of company. However, institutional arrangements on whether or not disclosing the consolidated statements and parent statements at the same time are still different among countries, under the background of the international convergence of accounting standards. Hence, under the dimensions such as the accounting system, the background of financial reporting and disclosure and etc., this article attempts to investigate the necessity, correlation, and the overall usefulness of the dual disclosure of the information about both consolidated statements and parent statements, employing empirical works and theoretical analysis. Furthermore, based the above research, this dissertation makes a preliminary research on the division and cooperation between consolidated statements and parent statements.The reminder of this treatise is organized as the following four sections. Section1gives a brief exposition of the background and significance of this research, as well as the key issues to be addressed. This section also documents an overview of the relevant literature at home and abroad on this research topic, which mainly focused on the comparisons between the consolidated statements and parent statements and the efficiency under dual disclosure. The novelty of this study is stated after outlining the methodology to be used and the structure of this article. The following Section2provides the analysis of the influence of the consolidated statements to the disclosure mode of financial reports and makes further discussions on the formation and feature of single and dual disclosure by combing such background, development and theory of consolidated statements. Moreover, by analyzing the differences on functional orientations between consolidated and parent statements, the necessity of these two statements can be derived. From the perspective of the evolution of equity investment accounting method through countries, Section3explains the complementary and alternative relationship between the two statements. Next, by giving the example of the development and changes in China’s equity investment accounting method, a further consideration about the difference of the net in the two statements is detailed. Finally, Section4gives the conclusion. Following this, the optimization of the division and cooperation of these two statements are presented. In addition, this article suggests the possible way to improve the dual information disclosure system and provides some insights and valuable policy suggestions for further study.