What Is a Corporate Group?

An enterprise group is a high-level organizational form of a modern enterprise. It takes one or more powerful large-scale enterprises with investment center functions as the core, and several companies and units with close connections in assets, capital, and technology as the outer layer. A stable, multi-layered economic organization formed through bonds such as property rights arrangements, personnel control, and business collaboration.

Enterprise Group

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An enterprise group is a high-level organizational form of a modern enterprise. It takes one or more powerful large-scale enterprises with investment center functions as the core, and several companies and units with close connections in assets, capital, and technology as the outer layer. A stable, multi-layered economic organization formed through bonds such as property rights arrangements, personnel control, and business collaboration.

The overall rights and interests of an enterprise group are mainly maintained through clear property rights relations and contractual relationships within the group; the core is a large enterprise with strong strength. Economic entities that carry out major business activities in accordance with the headquarter's operating principles and unified management, or enterprise groups that have certain economic ties, although there is no relationship between property rights control and controlled entities.

In terms of structural form, an enterprise group is represented by a large-scale enterprise as the core and many enterprises as the periphery and a multi-layered organizational structure; on the joint bond, it is represented as a high-level, asset-based A deep and relatively stable enterprise joint organization; in the internal management system of the consortium, it is represented by member companies in the enterprise group, which maintains a relatively independent position and implements a unified leadership and hierarchical management system. The leadership system combined with decentralization; in the size and operation mode of the consortium, it is a large-scale and powerful enterprise consortium that operates across departments, regions, and even multinationals.

Enterprise groups mainly adopt "pyramid" and "surrounding" structures.

Pyramid structure, also known as shareholding structure, is a standard property right control model;

The surrounding structure is the reorganized form of a number of "pyramid" groups, showing the overall shape of a star moon. Both structures include four basic layers: core layer, compact layer, semi-compact layer and collaboration layer. ^[1]

1. The positive role of company groups

(1) Conducive to breaking "

Two backgrounds generated by enterprise groups:

(1)

The development of enterprise groups in developed countries is most typical of the United States and Japan, and represents the evolution of eastern and western enterprise groups.

1. The growth history of American corporate groups

From the end of the 19th century to the beginning of the 20th century, the important characteristics of monopolistic organizations were

HD

(One)

1. Large-scale production joint company. It is a large enterprise organization composed of many enterprises producing similar goods or some enterprises closely related to each other in production. The characteristics of large-scale production joint companies are as follows: a backbone factory or a company that produces famous products is the leader, and a large number of companies are gathered around it to form a large professional cooperation network; the business relationship between core companies and member companies is Down

The management systems of different types of company groups are also different.

Equity-based company groups use capital as an authoritative method to achieve unified management of internal members. It is precisely because of the characteristics of the group parent company's vertical holding and holding of subsidiaries and affiliated companies that it determines the core position of the group parent company. Generally speaking, the core enterprises of the Group mainly control and coordinate the business operations of the Group mainly by participating in the capital and personnel of a large number of member companies.

Due to the various bonds between the contractual company groups, the relative closeness and uniformity of the company group are lower than that of the equity company group. Therefore, it is advisable to adopt a joint management system and be led by the core enterprises at the core level. Establish a joint management committee, each member of the group is a member, and implement group leadership.

Parent-child legal relationship of company group

The parent company refers to the ability to actually control other companies by holding a certain amount of equity, or by contract

The transnational operation of enterprise groups is the need to push large enterprise groups to the international market, and is a global operation formed by enterprise groups based on their domestic development. Not only a large part of the sales activities of products and the procurement of raw materials and fuels are carried out abroad, but also a large part of the production process, as well as part of the research and development activities are also carried out abroad, even in many countries. Transnational operations are a necessary form of developing a market economy.

Several Characteristics of Consolidated Financial Statements of Enterprise Groups

The external performance of the consolidated financial statements is flexible

On the one hand, affected by the theory of the preparation of consolidated financial statements (parent company theory, entity theory, ownership theory), different enterprises in different countries and the same country may choose different consolidation scopes and methods of preparing consolidated financial statements; on the other hand, modern enterprises To diversify risks, we often follow a diversified business path. A large number of cross-industry and cross-industry investments have emerged, leading to the emergence of completely different subsidiaries within a group. For example, the group has both a subsidiary operating real estate and a subsidiary operating guarantee business. For such a group company, not only the business nature of each subsidiary is different, but also the accounting system of each subsidiary is likely to have a large difference, so that it is easy for the consolidated accounting statements prepared by the enterprise group to choose different consolidation ranges and consolidations. Accounting statement preparation method. So that the consolidated accounting statements have different external performance.

The consolidated financial statements have the correctness of the logical relationship in the preparation process

The consolidated financial statements of the enterprise group are prepared by the parent company based on the accounting statements of the parent company and its subsidiaries within the scope of the consolidation. (In addition to the corresponding adjustments to the investment, creditor's rights and debts, and owner's equity items, the rest Most items are directly added). Under the condition of individual statements, the company's accounting statements have a "verifiable" correspondence with the books, vouchers, and physical objects. The correctness of the accounting statements can be tested by this "verifiability". However, under the conditions of consolidated accounting statements, due to the offsetting of intra-group transactions during the preparation process, it is impossible for the consolidated accounting statements and the books, vouchers, and physical documents of individual enterprises scattered in the enterprise group to exist in the form of "verifiable" "Sexual relationship", the correctness of the consolidated financial statements only has the meaning of whether the logical relationship is correct.

Several Characteristics of Consolidated Financial Statements of Enterprise Groups

The consolidated financial statements of an enterprise group consider the enterprise group consisting of the parent company and its subsidiaries as a separate accounting entity. Based on the individual accounting statements prepared by the parent company and its subsidiaries, the parent company's consolidated financial statements reflect the financial status and operating results of the enterprise group. And cash flow accounting statements. Compared with individual accounting statements, the preparation of consolidated financial statements of enterprise groups has the following characteristics.

The corporate group reflected in the consolidated financial statements is the "subject" in the accounting sense

From the concept of consolidated accounting statements, under the condition that the investor forms a group at the expense of transferring assets and forming a controlling equity in a subsidiary, the consolidated accounting statement is based on the entire enterprise group as a unit to incorporate the enterprise group merger Based on the individual financial statements of the parent company and the subsidiary, based on other relevant information, after adjusting the long-term equity investment in the subsidiary in accordance with the equity method, it offsets internal transactions between the parent company and the subsidiary and the subsidiary. The impact of the statement was prepared. That is to say, the parent company and the subsidiaries that make up the group are independent economic entities, have separate financial and operating systems, and can independently issue financial reports to their shareholders. Each parent company and subsidiary in the group effectively controls the resources shown in their statements, and uses the resources disclosed in their statements to obtain their financial results. The parent company and its subsidiaries in the entire organization are organically linked by the equity relationship. However, there is no "group" accounting entity that controls and coordinates the resources listed in the accounting statements and seeks economic benefits through the effective use or control of such resources. This "subject" in the accounting sense is not an accounting subject in the legal sense and does not reflect the financial status and operating results of any existing enterprise. The individual accounting statements reflect the financial status and operating results of a single independent corporate legal person, and the object of reflection is the corporate legal person, an accounting subject in the legal sense.