Study On The Goodwill's Sequent Measurement

With the establishment and development of China's property rights trading market and securities markets, as well as the horizontal and vertical development of the market economy, more and more M&A activities among enterprises happen in China capital market, the standardization of the mergers and acquisitions behaviors also greatly promote the study and the development of China's Goodwill accounting theories and the implementation and the formulation of the CAS. In 2006, China promulgated new CAS and the terms of goodwill carried out two major changes, the first one is the introduction of fair value property which is used under the business combination where the M&A parties are not the same parent company, and also pulling Goodwill out of the intangible assets and mainly regulation on the specific "Business Combination" and "Assets Impairment" guidelines. Another one is the change of the subsequent method, from amortization method to impairment test method. The above two significant change make CAS have no real difference against the IAS. However, China does not fully equipped for the implementation of the impairment testing in Goodwill, which is bound for many difficulties and problems in the implementation of CAS.Base on review and comment of the theory on the Goodwill's nature and subsequent measurement, this paper will conduct deeply empirical analysis on the Goodwill impairment measurement behavior of the listed companies. The results shows as follows:provision for impairment of goodwill exists implicit motives for earnings management, goodwill is not fully reflect the future profitability of the combined party but closely related with the mergers' overall profitability, China's listed companies have arrange of problem in the implementation and disclosure of the Goodwill's impairment test.This paper can be divided into four parts:Part I is introduction which mainly discuss the research background, research meaning and the review of the domestic and foreign relative study, and introduce the research ideas, contents and the methods. The second part is the theory of the nature of goodwill, which mainly introduce the relative views and comments to the nature of Goodwill. The third part is about the theory on the Goodwill's subsequent measurement, which mainly introduce relative theories and the evolution of China's Goodwill's subsequent measurement, and also interpret the real reason for the change of Goodwill's subsequent measurement and the difference between two methods. The fourth part is empirical analysis, based on the listed companies' financial reports from 2007 to 2009, proposing hypothesis and the contracture of model, and obtaining the results including descriptive statistics analysis, ANOVA test analysis, and regression test analysis. The fifth part is how to improve the subsequent measurement of goodwill. According to the previous theoretical and empirical analysis, this papery finally propose several recommendations to China's Goodwill subsequent measurement.