| In recent years,the treatment of goodwill has been a hot issue in academic circles.Since 2010,there has been a high premium M&A boom in China,which has spawned many high goodwill enterprises.Due to the improper initial recognition and subsequent measurement of business reputation,the phenomenon of business reputation explosion is everywhere.Some enterprises acquired by high premium suddenly changed their faces after the performance commitment reporting period,and their profitability declined significantly,which led to the loss of goodwill impairment of the parent company,caused great damage to investors and disturbed the order of the stock market.What are the causes of high goodwill and goodwill impairment? What are their economic consequences? This is the concern of many investors.Huayi Brothers is a case with a large amount of goodwill impairment in the film and television industry.The company’s merger and acquisition in 2010-2015 resulted in a high amount of goodwill,and on December 31,2018,it accrued a goodwill impairment of up to 973 million yuan,among which the reasons are thought-provoking.Therefore,this paper selects Huayi Brothers as a typical case of goodwill impairment.First of all,this paper combs the relevant information of goodwill and goodwill impairment,and tells the macro situation of goodwill and goodwill impairment in film and television industry at that time.Then,this paper gives a brief introduction and business introduction to Huayi Brothers,and reviews its financial situation in the company profile.The financial situation shows that Huayi Brothers’ short-term and long-term solvency is poor,and faces huge profits and losses in 2018 and 2019.Then in the case analysis part,through the analysis of Huayi Brothers’ goodwill impairment events,we can find that the main reasons for high premium M&A are performance commitment,income method evaluation,limited intangible assets and the suspected interest transmission of the management.After that,through the analysis of the reasons for goodwill impairment,we can find that the main reasons are as follows.First,high premium M&A improves the probability of goodwill impairment.Secondly,based on the delay and subjectivity of impairment test,the impairment provision of goodwill in the early stage is insufficient.Third,the film and television industry has a high risk,which is reflected in the long production cycle of film and television plays,the rapid change of audience demand and the increase of industry supervision.At the same time,this paper also expounds three problems of goodwill information disclosure.First,incomplete information of initial acquisition cost.Second,the lack of the evaluation content of identifiable net assets.Third,imperfect information disclosure of goodwill impairment test.Finally,this paper analyzes the impact of goodwill impairment on the company from the perspective of company operation and stock price.Combining the above analyses,this article presents some suggestions from three angles: first recognition of goodwill,subsequent measurement and disclosure of goodwill information.From the perspective of initial recognition of goodwill,listed companies should use performance commitment carefully,improve the income method,and improve the identification of intangible assets.From the perspective of follow-up measurement,the relevant departments should refine the identification of impairment test asset group,improve the follow-up measurement method of goodwill,and the regulatory departments should also strengthen their supervision responsibilities.Finally,listed companies should improve the disclosure of goodwill information.With the increase of the phenomenon of goodwill explosion in China,enterprises should pay more attention to the risk of goodwill impairment,understand the causes of each risk and the economic consequences brought to enterprises,at the same time,this paper hopes to give some enlightenment to enterprises in China to prevent the risk of goodwill impairment in the future. |
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