A Study On The Impact Of Mergers&Acquisitions Goodwill And Impairment On Company Performance

With the fiery of China’s Mergers & Acquisitions market,especially the bull market in 2015,M&A goodwill of listed companies has risen.By 2018,more than half of the companies have M&A goodwill,and at the same time,the proportion of companies with goodwill impairment is over 40% in above enterprises.More seriously,the amount of goodwill impairment can not to be underestimated.Then,why the phenomenon of mergers and acquisitions goodwill and goodwill impairment appears at the same time? How does it relate to company performance?Based on the theoretical analysis,this paper selects the listed companies with M&A goodwill and goodwill impairment by listing the notes of the 2010-2018 financial statements.Taking M&A goodwill and goodwill impairment as the independent variables and company’s performances as dependent variable,the correlation between them is studied.This paper selects the case between Huawei Stock and Fantasy Star Garde to analyze.It focuses on analyzing the causes and economic consequences of high goodwill,and sources of impairment of high-goodwill.This paper believes that the high goodwill of this M&A transaction is mainly due to the desire of realizing the layout of the multi-connected entertainment industry.Secondly,the film industry is popular in the M&A market,which makes the imbalance between supply and demand.Strong profitability of intangible assets of cultural enterprises is another reason.At last,performance commitment factors also cause high goodwill.The high-yield economic consequences have indeed improved the company’s market performance in the short run,but the effect is unsustainable.The risk sources of goodwill impairment are multi-faceted,mainly including industrial environmental risks,resource integration risks,talent training risks,and avoiding delisting risks.Finally,based on the conclusion of case analysis,the preventive measures against goodwill impairment risk are proposed.From the perspective of acquirer,full due diligence should be conducted before mergers and acquisitions,reasonable and prudent valuation should be conducted during mergers and acquisitions,and continuous attention should be paid to the integration process after mergers and acquisitions;from the perspective of the regulatory authorities,firstly,strengthening the supervision of abnormal situations and standardizing the information disclosure system.Secondly,improving the subsequent measurement of goodwill to avoid “taking a big bath” behavior.