Research On Related Accounting Issues Of Reverse Purchase

The development of enterprises is inseparable from the support of funds.The listing of equity financing has become the choice of many companies.At present,China's IPO implements an approval system,which has high requirements for listed companies and hinders their process of listing.In this context,reverse purchase is welcomed by many companies because of its short waiting time and low cost of listing.With the increasing number of reverse purchase transactions,related accounting problems have gradually attracted the attention of the theoretical community.However,the development history of reverse purchases in China and the related theoretical research started late.There are still some imperfections in the reverse purchase accounting standards.The calculation of the merger cost in the reverse purchase in China is not clear.The goodwill generated by the merger is only reflected in the consolidated statement level,which will result in a large difference between the net assets of the individual statements and the net assets of the consolidated statements.This paper compares and analyzes International accounting standards,US accounting standards and China's accounting standards.The study finds that foreign countries have relatively perfect regulations on related accounting issues in reverse purchase.Therefore,based on the actual situation in China,China can properly draw on the provisions of International and US accounting standards to improve relevant domestic accounting standards.At the same time,this paper uses the case analysis method to study the accounting treatment in the reverse purchase process of Greenland Group,mainly including the selection of accounting treatment methods,the determination of merger cost and the preparation of consolidated financial statements.Under the reverse purchase method,the difference between the merger cost and the identifiable net assets of the listed company is included in goodwill or current profit and loss.Under the principle of equity trading,this difference is reversed to adjust the capital reserve,which affects the owner's equity.Therefore,the accounting consequences of different accounting treatment methods are different.The study finds that the return on net assets under the principle of equity trading is higher,which is more conducive to the financing activities after listing.The author suggests relevant departments should clarify the merger cost in the reverse purchase,especially the confirmation of the merger cost should involve the non-standard type of reverse merger.They should also enhance the confinnation and measurement of the merger cost and the rationality of the reporting of the consolidated statement.The principle of equity trading in practice is more beneficial to enterprises,but enterprises should strictly abide by relevant laws and regulations and accounting standards to select appropriate accounting treatment methods in accordance with the specific conditions of transactions and to avoid abusing the principle of equity transactions.Relevant departments should increase the regulatory power of reverse purchases.It is hoped that through the efforts of all sectors of society,we will jointly promote the improvement of relevant domestic accounting theories and promote the healthy development of China's capital market.