Research On Evaluation Of The Value Of Partial Goodwill Of Gao Xinxing Co. Ltd. For Financial Reporting —A Perspective Of Residual Income

Valuation for Financial Reporting(VFR) refers to the behavior and processes aimed at analyzing and estimating the fair value or specific value of assets and liabilities existed in financial reporting. Executed by Certificated Public Valuer(CPV) with specific appraisal technique, Valuation for Financial Reporting is based on Accounting Standards for Business Enterprises and relevant requirements for accounting measurements and disclosure. This new type of valuation reflects combination of accounting and valuation, for valuation industry, valuation institutes can widen their business field.Firstly, this paper finds that residual income model is a better model for the goodwill valuation for financial reporting purposes, by reviewing the concept of goodwill and the related content of impairment of goodwill in China’s accounting standards. Then this paper builds modified residual income valuation model for goodwill valuation, and introduces the key factors driving the value of goodwill- revenue growth rate(g) and return on invested capital(ROIC). Secondly, This paper presents a detailed goodwill evaluation process in the example of Gao Xinxing Technology Group Co. Ltd. as regards to its financial reporting and finds that the using of the modified residual income model makes appraisal result more forward-looking and accurate. Finally, through theoretical study and practical investigation, this paper gives some suggestions and comments, hoping to provide some help for Certificated Public Valuer in China.Possible contributions of this paper mainly can be described as follows: Firstly, This paper researches goodwill valuation for financial reporting purposes issues specially. Secondly, this paper builds a modified residual income model goodwill valuation for financial reporting purposes. Thirdly, this paper presents a detailed goodwill evaluation process in the example of Gao Xinxing Technology Group Co. Ltd. as regards to its financial reporting. It is believed that those practical researches to some extent will contribute to further development of relevant valuation practices in China.