Research On The Impairment Of Goodwill In M&A Of Lecron Industrial Development Group Co.,ltd.

In the last few years,with the M&A transactions becoming more and more popular,there are more and more problems in M&A,and even bring some unpredictable risks to companies,such as goodwill impairment risk and performance commitment risk,which eventually lead to the turnover of enterprise performance and the sharp drop of stock price.At the same time,the high trade prices in the process of M&A have also aroused extensive attention and attracted high concern of the society.M&A goodwill can show synergistic effect to a certain extent,but most M&A activities will sign performance commitment.Once the performance cannot be achieved,goodwill impairment will be withdrawn,so that it will decrease profits.In this context,this paper firstly explains and arranges the essence,measurement and theoretical basis of goodwill.After that,two companies that Lecron Industrial Development Group Co.,ltd.acquired at a high premium were selected as the case study objects.In M&A activities,the huge risk of goodwill impairment generally comes from M&A activities with high price.In the following measurement,this paper pays attention to the impairment of huge M&A goodwill.By analyzing the performance commitment,it can be seen whether there are signs of impairment,and focus on extreme phenomenon of goodwill impairment provision of he three years from 2015 to 2017.There was no signs for goodwill impairment of M&A in the three year,but a large amount of provision for impairment began to be made in 2018.In order to make the demonstration more sufficient,this paper will combine the characteristics of the media industry in the analysis process,hoping to put forward more practical and targeted suggestions.Finally,from the perspective of Lecron Industrial Development Group Co.,ltd.,the paper puts forward the way to deal with a situation to improve the goodwill of M&A.Lecron Industrial Development Group Co.,ltd.should choose target of the merger object carefully and reasonably evaluate the value,sign a reasonable game agreement with the acquired party,enhance the internal control system,and prevent the board of directors from being dominated by one person,and finally enhance the quality of the disclosure of goodwill information about M&A activities.This paper hopes to analyze the typical case of goodwill impairment of Lecron Industrial Development Group Co.,ltd.,and guide enterprises to focus on the reasons and rationality of the substantial impairment of listed companies goodwill.In M&A activities,whether it is the setting of enterprise valuation and performance commitment,or conducting the goodwill impairment test after M&A,the information disclosed influences decision-making of managers.For the sake of making the a beneficial decision on the development of the enterprise and shareholders,we should decrease risk,plan reasonable performance commitment,disclose complete goodwill information,and make business management better.