Research On The Application Of Reverse Purchase Method In M&A Of J Company

Listing financing is the main way for enterprises to obtain large amounts of funds quickly.Listed companies can make better use of the acquired funds to expand the scale of enterprises.Therefore,many enterprises adopt different methods in order to obtain a listing status.And now more and more cases of backdoor listing,compared with the listing of IPO market which contained cumbersome procedures,lots of demanding,a long time review,the backdoor listing is relatively simple,there is no higher standard,allowing companies to achieve the purpose of listing in a short period of time.While the reverse purchase as a special way backdoor listing,its use has also increased in recent years.Reverse purchase is more and more popular in our country,especially in the 2014 and 2015,there has been a boom.In 2017,although China has strengthened the supervision of the listed companies,the principles of reverse purchase are still in the developing stage.However,the guidelines on reverse purchase are still at the stage of development.This article would like to analyze the presence of ambiguity or even a vulnerability in relation to the criteria for reverse purchase.Therefore,some enterprises use these uncertainties to carry out earnings management of enterprises,or make use of the fuzzy rules to join their own judgment and try to choose the accounting treatment method that is in line with the interests of enterprises.To maintain the interests of investors and promote the healthy development of the market.In this paper,we study the accounting treatment from reverse purchase,a special backdoor listing method,and analyze how enterprises achieved their last purpose through reverse purchase.Based on this,the research may have ambiguous definitions or loopholes place,for example,the judgment of "business" and the measurement of the cost of the merger,the definition of reverse purchase are also ambiguous.The definition require equity bond transactions,and the actual operation of this definition is too narrow,the practice will involve more different ways and standards can not make the relevant guidelines useful,the guidelines of poor operability.And there are some relevant suggestions.In addition,Case analysis is also used,it borrowed the case that Giant Network borrowed the listing of Century Cruise Ship Shell,and analyzed its backdoor listing process and accounting treatment.The enterprise was even more special.The process of backdoor borrowing was more complicated.As for the reverse purchase method,the treatment of the case company is also worth considering.In the end,some questions are raised about the application process of the case company,the reasons are analyzed from the point of view of the guidelines,and relevant suggestions are put forward,including internal and external aspects,rich guidelines and external supervision and improvement of the environment.