Intangible Assets Evaluation In The Perspective Of Enterprise Merger

In recent years, the online game industry has risen rapidly, online game companieswhich have strong financing needs become the object of attention of M&A market.According to incomplete statistics, from2013to2014, online game enterprises as thetarget of M&A cases amounts to as many as16. The year of2013is even refered to thefirst year of mergers and acquisitions. Therefore, during the purchase price allocation(short for PPA), how to measure the assets and liabilities of the network game industrybecome the focus of both sides.According to The Accounting Standards of Business Enterprises, businesscombination which is not under the same control must allocate the purchase price anddetermine the fair value of identifiable assets and liabilities. When it comes to onlinegame industry, the most important asset is intangible assets. How to determine the valueof intangible assets can affect not only consolidated financial balance sheet on theacquisition date, but also will influence the future accounting profits. Therefore,determining the value of intangible assets of online game industry is very significant.Based on the concept of purchase price allocation, combine the characteristics ofthe online game industry with identification of the intangible assets, finally chooseincome method to evaluate the identifiable intangible assets during the PPA. This paperis mainly divided into the following six parts. The first part introduces the researchbackground and the relevant literature review. The second part briefly discusses relatedconcepts: what is business combination, the premise and evaluation object and processdetails of PPA. The third part analyze the online game industry and try to define theintangible assets of online game industry. The fourth part reviews evaluation methods,and discusses applicability of income approach and parameters selection in order toexplore the intangible assets assessment method of the online game industry. The fifthpart combines theory with practice, chooses Youzu Information Company for theanalysis object, applies the ideas and methods mentioned above into practicalapplication. The sixth part is conclusion, summarizes the full text, and puts forwardsome reasonable advice.