Research On The Impairment Of Goodwill In The Film And Television Industry

With the continuous development of China’s economy and the significant upgrading of the consumer structure,the film and television industry has been developing rapidly in China in recent years.In order to improve the layout of the industry chain and thus create synergies,many film and television companies have been engaged in large-scale,highpriced mergers and acquisitions since their listing,and these mergers and acquisitions have led to the accumulation of huge amounts of goodwill in China’s film and television industry.The goodwill bubble not only puts pressure on the performance growth of enterprises,but also lays the hidden danger of goodwill impairment.At the same time,due to the "peer effect",if most enterprises in the same industry concentrate on goodwill impairment in the same period,it will have a huge impact on the stability of the financial market and even cause systemic financial risks.Therefore,in order to "guard the bottom line of no systemic financial risk",we must pay attention to the study of goodwill impairment.The goodwill scale of the film and television industry is higher than that of the general industry due to its asset-light,high-risk and high-valuation characteristics.Moreover,under the influence of the new pneumonia epidemic,the future development of the industry is full of uncertainties,which to a certain extent exacerbates the risk of the goodwill bubble bursting.Under such circumstances,it has a more profound practical significance to study the goodwill impairment issue in the film and television industry.Based on the above background and considerations,this paper adopts a case study approach and takes Zhejiang Huace Film & Tv Co.,Ltd.,a representative listed company in China’s film and television industry,as the research object to study its goodwill impairment related issues.The research approach of this paper is as follows: first,it introduces the formation process of the high amount of goodwill of Zhejiang Huace Film& Tv Co.,Ltd.,then explains the specific circumstances of its goodwill impairment,then analyzes in depth the motives,problems and economic consequences of its goodwill impairment,and finally puts forward targeted recommendations in response to the abovementioned problems and research findings.This paper finds that the motives for goodwill impairment of Zhejiang Huace Film& Tv Co.,Ltd.include the influence of the "peer effect",financial "bathing" and avoidance of policy risks.The problems in the goodwill impairment process include high impairment amounts,untimely goodwill impairment,and inadequate information disclosure.The huge amount of goodwill impairment has led to different degrees of decline in earnings,debt service,operating capacity and share price of Zhejiang Huace Film & Tv Co.,Ltd.Based on the above problems,this paper puts forward targeted recommendations to control the M&A premium rate,improve goodwill-related information disclosure,standardize goodwill impairment testing,and strengthen supervision and external auditing.It is hoped that the research results of this paper can provide theoretical and practical references for the goodwill impairment problem and financial risk prevention of listed companies in China.