Merger of holdings under common control (Internal to the group)

Merger of holdings not under common control (Merger between unrelated parties)

The initial investment cost of the long-term equity investment is based on the share of the book value of the combined party's owner's equity in the ultimate controlling party's consolidated financial statements obtained on the merger date.

At fair value (merger cost) as the initial investment cost of long-term equity investments

The difference is on the credit side: adjustment to capital reserve (capital premium or equity premium); The difference is on the debit side: if the capital reserve (capital premium or equity premium) is insufficient to offset, the surplus reserve and undistributed profits will be offset in turn.

Treated as buy now and buy later Need to recognize disposal gains and losses

Should be included in the current profit and loss when incurred - administrative expenses Borrow: administrative expenses Loan: bank deposit

Transaction costs directly related to the issuance of debt instruments as merger consideration shall be included in the initial recognition amount of the debt instruments.

The merging party acquires the equity of the merged party by paying monetary funds, transferring non-cash assets, etc. Borrow: Long-term equity investment Capital reserve—share premium Surplus reserve Profit distribution - undistributed profits Loans: bank deposits and other related assets Capital reserve—share premium

The merging party acquires the equity of the merged party by issuing shares Borrow: Long-term equity investment Credit: Equity [face value] Capital reserve—share premium

Obtained by paying cash Borrow: Long-term equity investment Loan: bank deposit

Inventories are paid in the form of non-monetary assets and are treated as normal transfers: Borrow: Long-term equity investment Loan: Main business income Taxes payable - Value-added tax payable (output tax) Borrow: Main business costs Inventory impairment Credit: Inventory goods

In the form of payment of non-monetary assets - fixed assets, treated as normal transfer:

Intangible assets are paid in the form of non-monetary assets and are treated as normal transfers: Borrow: Long-term equity investment Accumulated amortization Credit: Intangible assets Taxes payable - Value-added tax payable (output tax) Profit and loss from asset disposal [squeeze, borrow or loan]

Obtained by issuing shares Borrow: Long-term equity investment Credit: Equity [face value] Capital reserve - equity premium

cost method

equity method

cost method

equity method

cost method

equity method

cost method

equity method

cost method

equity method

cost method

equity method

Cost method disposal entries Debit: bank deposit Provision for impairment of long-term equity investments Loan: Long-term equity investment Investment income (can be borrowed or loaned)

Equity method disposal entries Debit: bank deposit Provision for impairment of long-term equity investments Credit: Long-term equity investment - investment cost ——Profit and loss adjustment (can be borrowed or loaned) ——Other comprehensive income (can be borrowed or loaned) ——Other changes in equity (can be borrowed or loaned) Investment income (can be borrowed or loaned)

Debit: Capital Reserve - Other Capital Reserve (carried forward proportionally or in full) Credit: Investment income or vice versa

Debit: other comprehensive income (carried forward proportionally or in full) Loans: investment income, etc. or vice versa

If the measurement result of the recoverable amount of a long-term equity investment shows that the recoverable amount is lower than the book value, it means that the long-term equity investment has suffered impairment losses, and its book value should be written down to the recoverable amount. Borrow: Asset impairment loss Credit: Provision for impairment of long-term equity investments

Once the long-term equity investment impairment loss is recognized, it cannot be reversed in subsequent accounting periods.