What does entity theory mean? What is the explanation of the entity theory

Entity Theory was first proposed by American accounting scholar Maurice Moonitz, and this theory was comprehensively introduced by the American Accounting Association's 1994 book "The Entity Theory of Consolidated Statements". The entity theory is more in line with the purpose and requirements of the preparation of consolidated financial statements, but when there is a minority interest in the subsidiary, there are different views in the academic circles on whether the net assets belonging to the minority shareholders can be inferred and valued based on the cost of the parent company's acquisition of the shares of the subsidiary, and the profits of the minority shareholders can be calculated. Entity theory is a type of merging theory.

From the perspective of an enterprise group, it explains and explains a set of principles and conclusions of the preparation methods of consolidated financial statements, such as the purpose of consolidated accounting statements, the preparation method, the nature of minority shares, the valuation of consolidated assets, the measurement of consolidated profits, and the offsetting of unrealized profits and losses within the enterprise group. It is an extension of the theory of substance.

1. The purpose and user of the consolidated accounting statements. Consolidated accounting statements are accounting statements prepared by the entire enterprise group as the accounting entity, and they serve all groups or individuals, including minority shareholders, who have interests in the enterprise group.

2. The meaning of consolidated net profit and the nature of minority shareholders' profits. Consolidated net profit is the net profit of all equity holders of the entire enterprise group; The profit of minority shareholders is a part of the net profit of the enterprise group, which is the part of the net profit of the enterprise group that is distributed to the minority shareholders; Minority profits are measured in the same way that the parent company recognises investment income from subsidiaries.

3. The nature of minority shareholders' interests. Minority interests are part of the consolidated shareholders' interests of an enterprise group, and the valuation of minority interests is carried out using the same method as that of majority interests.

4. Consolidation of net assets of subsidiaries. All net assets of a subsidiary are valued at the fair value of the intermediary payments made by the parent company when the equity investment is made, so that the net assets of the minority and majority interests are valued in the same way.

5. Treatment of unrealized profits and losses within the enterprise group. Whether it is the business of the parent company to the assets of the subsidiary, or the business of the subsidiary to the assets of the parent company, the profits and losses arising from them shall be fully offset against the consolidated net profit, but when the subsidiary is transferred to the assets of the parent company, the unrealized gains and losses offset shall be apportioned according to the proportion of the majority and minority shares.

6. Treatment of the presumed profit or loss of bonds within the enterprise group. The constructive profit or loss arising from the purchase of bonds issued by the parent company by the subsidiary or the purchase of bonds issued by the subsidiary by the parent company shall be fully adjusted for the consolidated net profit, but when the parent company purchases the bonds issued by the subsidiary, the presumptive profit or loss recognized shall be apportioned according to the proportion of the majority and minority shares.

It means that an enterprise group is an economic association composed of all member enterprises, the status of all member enterprises in the enterprise group is equal, the consolidated accounting statements are the accounting statements of the entire economic association, and the preparation of consolidated accounting statements is to serve the entire economic association.

In October 2004, he took the self-study exam "Advanced Financial Accounting" and explained the third question of the noun in the real question.

What is the explanation of sock burning in the theory of entity rationalization.

Proofreading Answer:The entity theory holds that an enterprise group is an economic consortium composed of all member enterprises, the status of each member enterprise is equal, and the preparation of consolidated accounting statements serves the entire economic association.

Whether it is the majority shareholders' equity or the minority shareholders' equity, it is regarded as the shareholders' equity of the enterprise group, and whether it is the income of the majority shareholders' equity or the income of the minority shareholders' equity, it is regarded as the income of the enterprise group.

As far as the database is concerned, an entity often refers to a collection of certain types of things, and the individual of each type of data object is called an entity.

e-r, known as entity-contact diagram, is a practical tool for describing the conceptual world and building conceptual models. The database is designed to describe the organizational schema using an E-R diagram and then further transformed into any DBMS-supported data model.

The three elements of an e-r diagram are entities, attributes, and connections, which are represented by rectangular boxes, elliptical boxes, and diamond boxes, respectively.

In the database, the so-called "entity" is the e-r model. The specific relationship is as follows:

The components of the E-R model are entity sets, attributes, and contact sets, which are represented as follows:

1) The entity set is represented by a rectangular box, and the name of the entity is filled in the rectangular box.

2) The attributes of an entity are represented by an elliptical box with the name of the attribute written in the box and connected to its entity set with undirected edges.

3) The connection between entities is represented by a diamond-shaped argument box, the connection is named with an appropriate meaning, the name is written in the diamond-shaped box, and the rectangular boxes of the entities participating in the connection are connected to the diamond-shaped box respectively with an undirected line, and the type of connection is indicated on the connecting line, i.e., -n or m-n.

Theoretical significance is a possibility summarized according to laws, experience, common sense, etc.

The practical meaning is the actual situation.

1. The difference between the two is that the former is the prediction that happened before something, and the latter is the summary that happened after something. Let's say:

A certain engineering team can build one house a day, and theoretically speaking, they can build 365 houses a year. In fact, they only build 200 houses a year, so it makes practical sense, to make a house, it also depends on the sky, and it can't be built on a rainy day.

2. In theory, what is read in books is actually summarized in practice.

3. In fact, it is reality, and it is conjecture in theory.

4. Theory is generally based on reality and summarized according to reality. But sometimes it is divorced from reality, so theory and practice are not the same.

In engineering practice, the results obtained by ignoring some minor factors are theoretical.

Theory is to discuss conjecture, reality is the meaning of action, simply put, it is to say and do.

In theory, what you read in books is actually summarized in practice.

In fact, it is reality, theoretically conjecture.

Entity is a Chinese word, and the pinyin is shí tǐ, which means things that exist objectively and can be distinguished from each other.