Research on Economic Consequences of the Implementation of China Combination Accounting Standards Based on the Company Value Theory
|School||Shenyang University of Technology|
|Keywords||Business combination accounting standards Economic consequences Value relevance|
The method the purchase method and the pooling of interests method of accounting for business combinations, different consolidation method applicable to different transactions in real terms in a business combination, the merger will also present the different accounting profit figures. Both merger combined market development have played an important role, but in view of the economic consequences of both business combination accounting methods have American business combination Accounting Standard (SFAS141) and the International business combination accounting standards (IFRS3) canceled the pooling of interests method of accounting for business combinations. China in 2006, the specification of the method of accounting for business combinations rather ambiguous provisions in the \the purchase method. Our business combination accounting standards under the environment of China's accounting standards continue to the convergence of international accounting standards, why allow the pooling of interest method and the purchase method two consolidation method exists, how to implement this the point of view of the economic consequences of this article studied. The economic consequences regardless of the choice of accounting policies will affect the company's future cash flows, the accounting policy choices will affect the decision-making behavior of managers and investors, and thus the impact on the value of the company. In other words, regardless of the method of accounting for business combinations choose whether it will affect the company's future cash flows, the pooling of interest method and the purchase method, give the company managers bring better accounting earnings figures, thus affecting the behavior of the manager's decision-making make them more inclined to choose a business combination under common control. Well, the accounting information to investors to see what impact different business combination accounting methods, empirical correlation between two angles, respectively, from the value of the business combination of market reaction, stock price and accounting information. The results of the market reaction: business combination under the same control can render better accounting profitability data, but the business combination occurs when the stock market gave a negative market reaction, and based on the business combination under common control of the fair value has a better positive reaction. Value of the the correlation findings: only owned subsidiaries acquired through business combinations under common control of the parent company, its stock price higher information and accounting reports, and has only acquired in business combination under common control, the parent company of a subsidiary, lower stock prices and accounting report information. That is, compared with the pooling of interests method, the purchase method of accounting information quality is higher.