China's Mergers And Acquisitions Of Goodwill Accounting Research

Since China have taked part in to the WTO. The economic have rapid development. In the influence of global economic integration, The company mergers and acquisitions increase every day. How to regulate the goodwill in the mergers and acquisitions become more and more important. As an intangible asset, Goodwill have a significant impact on the enterprise development and income. Research the goodwill accounting standards will help the accounting information users to understand the true assets of the enterprises and the role. The form of the goodwill accounting have a long history. So far some problems of goodwill can not form a generally accepted theory, such as the definition of the goodwill, the recognition of the goodwill etc. 2006 China promulgated a series of regulations standards for goodwill accounting system. Many proffessors dispute the goodwill accounting in the new standards. What the nature of the goodwill in mergers and acquisitions activity? How Goodwill accounting adjustments react on the corporate profits? It all worthy our study and concern.On the analysis of theory and system of domestic and foreign mergers and acquisitions, This paper use 109 Shanghai and Shenzhen joint stock companis data from 2003 to 2008 for samples. Research the relationship between the goodwill in mergers and acquisitions and corporate earnings. Verify the goodwill can really bring excess returns in the future. the paper properly position the goodwill. The essence of China's goodwill should be "excess profits concept." But the company's excess profits and the scale of goodwill has no obvious correlation. The author analyzes in detail the reasons.Believe that the essence of the goodwill should be"excess profits concept". Finally did a statistical analysis of the sample of the change. On the basic of the nature of our country goodwill should be "excess profits concept", according to the national economic development and statistical analysis result, advise the measurement of goodwill to use regular value assessment combined with the impairment test. Impairment testing and periodic revaluation of combining methods are: Employ an external agency periodically re-evaluate the value of goodwill. Apply the discounted excess earnings based on the "excess profits concept" theory to re-determine the goodwill value. The discounted excess evaluate the goodwill of the business every 5 years. The rest non-revaluation years according to the Accounting Standards do the value of the goodwill impairment test. Then Accrue the corresponding provision for impairment. This accounting treatment is more objective and reasonable. The movement of the value of goodwill can be reflected timely in the uncertainty economic environment. The external objective assessment of the enterprise make the value of goodwill more real. Improve the quality of the accounting information.