Research On The Economic Consequences Of The Business Combination Accounting Treatment Based On The Perspective Of Investors

Business combination is an important way of transforming concentration of capital into concentration of market resource allocation,which plays an important rols in the allocation of resources of captial maket.Business combination is a significant way to expand business scale and maket scale for increasing competitive advantage.Effective combination of accounting methods can provide useful accounting information of high quality to ensure the effective operation of the capital market,which can effectively guide the decision-making behavior of stakeholders. As a worldwide difficult problem, the accounting method itself is also the evolution of the economic environment and development needs of the countries and regions.Pooling of interests method has been banned in other country, using the purchase method to carry on the combination accounting matters, in our country the Accounting standards for Enterprises No.20-Combination Accounting standards of enterprises (CAS20) provides that Pooling of interests method is used to deal with business combination under the same control and the purchase method is used to deal with the business combination under the different control. Two kinds of accounting methods have essential differences in accounting.Differences of accounting methods leads to that accounting report information has a certain difference. Different accounting information has different consequences and performance,which influences the value judgment and decision of the stakeholders, producing corresponding economic consequences.In this paper, the economic consequences of different enterprise merger methods are studied based on the perspective of investors.This paper comprehensively introduces the related literature at home and abroad, around Pooling of interests method,if there is a reasonable basis and with different processing methods to bring the economic consequences of whether there is significant difference in two aspects of review, pointing out the advantages and disadvantages of existing research. The paper analyzes the relevant theory of the article, from the two aspects of enterprise merger and economic consequences. In view of the specific application of the purchase method and the pooling of interests in China, this paper makes a comparative analysis from two aspects of the accounting consequences arising from the application of the two methods and the existing problems in the practical application.In the empirical research part, the author selected the 2013-2014 annual enterprise merger of the Shanghai and Shenzhen Stock Exchange as the analysis sample, using SPSS20.0 statistical software for multiple linear regression. Based on the investor's angle of view, the economic consequence of the accounting information value relevance is studied. Empirical study results show that different corporate merger accounting processing method has different economic consequences, the purchase method has higher value relevance then pooling of interests method.The accounting information the purchase method provides is more conducive for investors to make the right decision.The paper puts forward some effective suggestions for the problems existing in the application of enterprise merger method in China. At the end of the paper, it also points out the deficiencies of this study and the future research ideas. With the development of China's capital market, only the purchase method will be used to carry out the accounting treatment of the combined business, which is consistent with the international financial reporting standards.