Research On The Accounting Treatment Of Business Combition Under The Same Control

Since continuously,the accounting problems of business combination have been controversial and attention-getting questions to both theoretical and practical circles,among which the accounting treatment about business combination under common control embraces the most controversy.The CAS 20,which classifies the business merger into two main classes named the “business combinations under common control” and the “business combinations not under common control” based on the control power,has not revised since it went public in 2006.The CAS 20 tends to use the “purchase method”,which is consistent with the international mainstream opinion,for the business combinations not under common control cases.However,it uses the “Pooling of Interest Method” for the business combinations under common control cases,which is an opposite view against the international mainstream opinion.It is worth to discuss the rationality of keeping the “Pooling of Interest Method” in the CAS as well as allowing this method to be used in the capital market,since the IFRS 3 and FAS 141 keep contain the related issues about the business combinations under common control problem in their main body,while the other mainstream economies tend to impose restrictions on the use of the “Pooling of Interest Method”.In order to study the rationality of keeping Pooling of Interest Method in CAS20,this paper describes the history and current status of the accounting treatment about business combination under common control based on related notion and theories.Meanwhile,this paper also describes the defect and improvement suggestions about the “Pooling of Interest Method” based on an M&A case to make a contribution to the development and improvement of the CAS20.