Study On The Influencing Factors Of Goodwill Impairments Of Listed Companies

In recent years,the securities and futures commission put much more attention on the goodwill impairments of listed companies.The latest wave of mergers and acquisitions make the goodwill impairments of listed companies become more important in both academic research field and capital market.So this dissertation will focus on the research problem of goodwill impairments,take case study method to analyze the influencing factors of goodwill impairments of listed companies and the determinants of the corporate decision to record goodwill impairment loss.First of all,I made clear the situation of all listed companies’ goodwill impairments and chose 35.COM Inc.as the target case company according to materiality principle and the actual situation as well as the availability of data.Second I analyzed the industrial background,the enterprise operation situation and the records of goodwill impairment comprehensively.Then I found three influencing factors:a)High valuation of assets appraisal,b)the decline of operating performance of seller firms,c)the behaviors of the circulation of restricted stock of majority shareholder.On this basis,I found the determinant of their behaviors.35.COM Inc.make use of the mergers and acquisitions to beautify their enterprise business structure and business performance,and the majority shareholder can gain large sums of money by cashing their stock at a high price.As a consequence,the management of 35.COM Inc.were not to evaluate the true profitability of target firms carefully,and not to make them integration and cooperative optimization.So the mergers and acquisitions dragged down their overall performance and caused goodwill impairment loss.Finally,I put forward two Suggestions:a)For the regulatory authority,I suggest to modify the current Accounting Information Disclosure System about the goodwill and goodwill impairments,which can avoid the overrated valuation of the acquisition target enterprise and improve the quality of enterprise’s accounting information.b)For the investors,I suggest them pay more attention to the identification of earnings management behavior in the records of goodwill impairment losses.This dissertation’s innovation:Take the case study method to analyze the goodwill impairment problem in TMT.Analyze the influencing factors and find out the fundamental motivation by the specific and real case company.