Research On The Selection Of Accounting Method Of W Company Equity Investment

With the continuous development of the economy and the emergence of new economic situations,the principle-oriented accounting standards cannot cover all economic situations,and the choice of accounting policies has become a problem that enterprises must consider.The choice of accounting policies directly affects the quality of accounting information,which in turn has a profound impact on stakeholders and even the industry and the capital market.Therefore,it is very important to standardize the choice of accounting policies and strengthen the supervision of the choice of accounting policies.From the acquisition and anti-acquisition cases of W Company and C Company,this paper discusses whether the accounting of W Company’s equity investment in C Company conforms to the relevant accounting standards,and reveals the problems existing in the choice of W Company’s equity investment accounting method for C Company.The motivation and economic consequences of W Company’s accounting policy choice are analyzed from a financial perspective.The results show that W Company’s accounting for C Company’s equity investment is debatable in terms of the confirmation of significant influence,and it does not fully meet the quality requirements of accounting information over form and the relevant standards of equity investment.W Company not only uses accounting policy choices to adjust its earnings,but also tries to boost market confidence and corporate value through accounting policy choices,so as to send a signal to the market that its strategy of acquiring C Company is successful.In view of the fact that the accounting policy selection in this case occurred in a specific context,this paper puts forward the following four governance suggestions:follow the quality requirements of accounting information that is more important than form,promote the combination of principles and rule-oriented standards,strengthen internal corporate governance and external supervision,Strengthen the professional ethics of accountants.Since most of the current accounting standards provide principled guidance,enterprises have a certain room for choice,and there is no shortage of abusing accounting policy choices.Therefore,in the face of complex economic business,it is necessary to supplement the principle-oriented accounting standards in combination with the rule-oriented.theoretical significance.In addition,strengthening internal and external supervision and the application of the quality requirements of accounting information on substance over form also have certain practical significance for standardizing the choice of corporate accounting policies.