The Research On Accounting Issues Of Reverse Merger

At present, the public finance is one of the main methods of corporate financing in China and is also the largest in all financing channels. As a result, the public finance will be listed as one of many enterprises’ periodic goal in order to be able to raise funds and expand the scale of development. Compared with the IPO, backdoor listing program is relatively simple and has the advantage of low cost. It makes some companies which don’t meet the conditions of IPO also have the possibility of a listing, thus becoming a choice of a lot of companies. Reverse merger, is a way of backdoor listings of many enterprises. Then, reverse merger related accounting problems also gradually become the hotspot of scholars.Although reverse merger gets more and more attention in the capital market in China, but a set of related regulations issued late and is not perfect. In 2008 the ministry of finance put forward the definition of reverse purchase and provided the relevant accounting treatment in the accounting standards for enterprises on 2008 for the first time. After further development, "enterprise accounting standards on 2010" is currently the most complete specifications on reverse purchase accounting. Although the policy about reverse purchase processes from coarse to fine, but the relevant specification is not perfect and standard application process is also facing many problems. For example, the cognizance of the business, the confirmation problems of merge goodwill and the combination costs and the accounting confirmation of non-standard types of reverse purchase are all not clear in related accounting norms of reverse purchase. Loopholes in accounting policies and accounting polices in blank is likely to result in chaos of accounting treatment in practice and lacking of comparability in financial information provided by enterprises, which will damage the interests of stakeholders and to a great extent could eventually affect the long-term development of capital market in China. Therefore, perfecting the related accounting norms and enhancing the comparability of consolidated accounting information is the problem which needs to solve in reverse purchase accounting.This article analyzes the problems existing in the reverse purchase from the four aspects of the cognizance of reverse purchase, the choice of accounting methods, the combination costs and the accounting confirmation of the goodwill, and expounds these problems reflected in the practice from the point of the case of Jiangsu Sha Steel Group Co., Ltd. Reverse acquiring Gaoxin Zhangtong Co., Ltd. and puts forward my own suggestions for related problems at the same time. And this paper also compares the international accounting standards and American accounting standards with China’s accounting standards and points out that the international accounting standards and the accounting standards of the United States are worthy of reference for our country. Finally, the paper suggests improving the accounting standard in our country from the following aspects to improve the comparability of accounting information. The paper suggests further enriching the connotation of reverse acquisitions, making the principle of the calculation of combination cost clear, independently identifying of shell value and making the definition and principles of accounting treatment of equity transaction principle clear, and carefully confirming negative goodwill.