What is a Buying Basis?
The purchase method, also known as the purchase and acceptance method, is one of the accounting treatment methods for business combinations.
Purchase method
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- 1. Record the purchase of shares issued by the business or the price paid. At this point, long-term investments should be debited (
- When writing off assets and liabilities, debit the transfer of property receivables (
- 1. In the vast majority of mergers, one company gains control of another company by paying cash, assets, etc.
- The enterprise implementing the merger shall
- Based on the coexistence of the purchase method and the equity combination method
- In China, facing
- China has always been cautious about purchasing law, because
- China has not yet released
- After establishing the status of the purchase method, how to solve the application of the purchase method in the enterprise and how to determine the fair value? We can start from two aspects. On the one hand, we can learn from IFR3 and FASB141, learn from their latest developments in merger standards, and establish and improve China's merger accounting standards.
- On the other hand, to create conditions for the smooth application of the purchase law in China and cultivate soil, this requires perfecting relevant regulations and markets. Although the accounting standards for business mergers regulate the accounting treatment of business mergers, due to the interrelationship between accounting concepts and standards, the research and improvement of related standards are also important pillars for the effective use of the purchase method. Accounting standards, asset evaluation standards, and at the same time strengthen the research on the conceptual framework of financial accounting. In addition, we will improve the capital market and property rights trading market, create a good market environment for fair value generation, and increase the degree of social recognition of fair value. This requires a series of systems, policies and legal arrangements, as well as a sound system of supervision and regulation.