Research On The Causes Of Continuous Provision Of Goodwill Impairment And Its Impact On Long-term Performance

In recent years,there have been some listed companies that have accrued goodwill impairment for three to four consecutive years.Prior to this,most of the goodwill impairment companies only adopted the method of accruing goodwill impairment within one to two years to alleviate the goodwill impairment value risk.After 2015,M&A cases were intensive,and after a three-year performance commitment period,the same intensive “thunderstorms” of goodwill occurred around2018.Due to the influence of the M&A boom,some companies have blindly joined the ranks of mergers and acquisitions,and after encountering the occasional huge impairment of goodwill,they will impair the huge amount of goodwill within one to two years after the performance commitment period.But in addition,the huge impairment of goodwill caused by inevitable factors still exists.In recent years,industry development has placed higher requirements on companies’ own profitability and operational capabilities.Companies in some emerging industries are also facing the possibility of accruing goodwill impairment for many consecutive years when facing the ever-changing market environment.In the future,it is very likely that an industry-based accrual method for multiple years(three years or more)to alleviate corporate risks is likely to occur.The reasons for accruing goodwill impairment for many years and its impact on the long-term performance of the company have become a question worthy of research in academia is also the main question to be explored in this article.This article first adopts the method of literature research,combs and summarizes the research results of the theoretical circle on the impairment of goodwill,the causes of impairment of goodwill,the impact of impairment of goodwill and long-term performance,and puts forward the viewpoints of this article.After that,use theoretical deduction to sort out the related concepts of goodwill impairment and the main theoretical basis.This article focuses on the single-case study method,taking the typical case of Tianji’s provision of goodwill impairment for Xintai Materials,first briefly describes the industry situation and the merger process,and conducts a descriptive analysis of the impairment of goodwill.After that,the focus will be on the causes of impairment of goodwill,and an in-depth analysis of the long-term performance impact caused by the provision of impairment of Xintai materials for three consecutive years,revealing the mechanism of the impairment effect of goodwill for many years,and finally these impacts put forward corresponding countermeasures and suggestions.