Research on Advantages and Disadvantages of the Cross Shareholding

Cross-shareholding structure of the equity in the company's economic well-developed Western countries already have several decades of development history, cross-shareholdings are common in many of the foreign capital market capital works, including the phenomenon of cross-shareholdings in Japan most typical, in 50 years of practice, Japan has experience of cross-shareholdings sweet cross-shareholdings bitter taste. Formed in a special historical period of cross-shareholdings after the split share structure reform of non-tradable shares lifted more exposed to the two sides of cross-shareholdings, the implementation of the new accounting standards is to enlarge the benefits and risks of cross-shareholdings. Soared and plummeted along with the 2007 stock market price, the cross-holdings prematurely experienced a journey from heaven to hell. How to correctly understand China's special cross-holdings and cross-holdings of two sides, cross-ownership experience and lessons learn from the United States, France, and Japan and other countries, this article seeks to analyze and grasp the connotation of cross-shareholdings and the pros and cons of comparison and the resulting full argument on the basis of the accounting issues, proposed the establishment and improvement of China's cross-shareholdings legal regulation and the accounting treatment improvement ideas and proposals. But it is foreseeable that as China's economy continues to mature in the next period of time, the cross-shareholdings will be more and more widely been applied. Western developed countries' historical experience tells us, has very distinct two sides of cross-shareholdings, if not its the valid boot regulation, not only its positive role can not play, also generated a lot of damage to the company's economic impact socio-economic The stable development. China's current legislative status quo of cross-shareholdings is very worrying, almost in a blank state, needs to be filled and perfect. Divided into five chapters: The first chapter; Chapter II Overview of cross-shareholdings and functional analysis; comparison of Chapter III of economics based on cross-shareholdings, and Chinese and foreign; Chapter of cross-holdings accounting issues; Chapter further explore the cross-shareholding issues. The first chapter. In this chapter discusses the cross-shareholdings research background and research purposes; simple overview of domestic and foreign research; papers using normative research and case analysis method of combining. Chapter II Overview of cross-shareholdings and functional analysis. Defined in this chapter the concept of cross-shareholdings, cross-shareholdings were classified according to different criteria; positive significance of cross-shareholding detail four are stable operating rights, promote strategic alliance between the operational efficiency, flexible financing scheduling and conducive to reduce operating risks; from five aspects, focusing on the negative significance of cross-shareholdings, resulting in capital inflated impede the normal trade order of the securities market, the breeding of the internal control restrict competition, and will distract the focus of the company. This paper argues that not violate the premise of the Companies Act and the Securities Act and other related laws, while certainly cross-shareholdings positive effect, its negative effects can not be ignored. Chapter economics basis of cross-shareholdings and Chinese and foreign comparison. This chapter first described three reasons for the emergence and development of cross-shareholdings. The independence and liberation of the corporate personality for the cross-shareholding generation provides the foundation of economic law; fierce market competition, and the growing popularity of the economies of scale and cross-holdings gradually become seek to establish and consolidate inter-company joint common way to get the more to the more extensive application; Shareholders Centrism \Second, the United States does not prohibit cross-shareholdings or proportion of the restrictions, France is strictly limited cross-shareholdings exist, as well as Japan's distinction doctrine also strictly prohibited in Japan, a subsidiary by the parent company shares of cross-holding between the non-parent-subsidiary stocks adopt a generous attitude, regulatory comparison through cross-shareholdings in these three countries, combined with China's actual situation, to explore our legislation to provide a reference sample. This article tend to establish the distinction 'mode in Japan, is liberalism in the United States and France, no doctrine compromise. Chapter IV cross holdings accounting issues. In this chapter due to the to cross shareholding phenomenon exist, resulting accounting measurement and accounting issues, the main problem affected the authenticity of the legitimacy of the registered capital, inflated corporate debt guarantee capacity, is apt to cause cross-shareholding companies The four aspects of the related party transactions between the distribution of profits and investment income false. A more detailed discussion of the problem of the distribution of profits and investment income, learn from generally applicable foreign treasury stock method and interactive distribution method comparison, and put forward some suggestions for improvement of our current method of profit distribution. In order to better reflect the accounting information authenticity and accuracy, interactive distribution method can better solve these problems, to cite the case of cross-shareholdings in listed companies Liaoning Fushun and GF Securities analysis and comparison can be drawn inflated revenue whitewash the financial statements of the suspects. To explore our accounting methods as well as legislation to provide a sample of the draw. Chapter V cross-shareholding issues in depth. The new \The performance of the company have a greater impact. In 2007 the bull case, we see a lot of cross-shareholding company's stock price soaring, fueled each other; while after 2008, were retired. In a bull market, the listed company holds a large number of other listed companies and unlisted companies equity stock reform of the holding company or IPO the circulation rights and the implementation of new accounting standards, make the listing of the company's net assets, earnings per share substantially increase thereby along share prices rose sharply, leading listed companies and other holders of the shares of listed companies also benefit indirectly lead rose. In a bear market the same one loss or declining. In this chapter based on the problems caused by cross-shareholdings above proposed regulation from the four aspects of cross-shareholdings proceeds. First, there should be cross-shareholdings behavior in terms of system specification. Second, to promote cross-shareholding companies to strengthen information disclosure. Third, to enhance investor guide, reducing the attractiveness of the cross-holdings of stocks. Fourth, we should determine the maximum amount of cross-shareholdings, to suppress a large share of cross-shareholdings, and to minimize the adverse effects of cross-shareholdings. In summary, this article norms combination of research methods and case studies, theory with practice, the comparison of cross-holdings abroad and our cross-shareholding legislation, combined with the current situation of our country, to explore our cross-shareholdings the legislative attitude should be taken and should draw on the legislative mode. Recommendations for improvements at the same time on the problem of the related party transactions triggered cross-shareholdings and investment income.