Research On Follow-up Measurement And Impairment Impact Of Enterprise M&A Goodwill

Over the past decades,M&A has become an emerging trend in China,this paper makes in depth analyses on the goodwill subsequent measurement and the reasons for the impairment of goodwill.In order to discuss the existing problems of the impairment test,the paper will use the Amortization Method and the Impairment Test Method to analyze the M&A purchased goodwill of Blue Focus acquire Bojie Advertisement cases.In-depth analysis will be performed to explore the possible reasons for the large amount of goodwill impairments losses.To the problems in the case,paper will make practical recommendations to the goodwill impairment test method,which plays a vital role in the control of the relevant risks.Goodwill has been controversial since it has to been introduced to the accounting research system.Due to the increasing number of M&A in our country,the goodwill of the M&A has been paid more and more attention,and become more complicated because of its particularity characteristic.The subsequent measurement of goodwill has changed over time,from the initial Permanent Amortization Method to the present Impairment Test Method,the choice of subsequent measurement method has become one of the focuses of accounting scholars practice.This paper would first introduce the basic theory of goodwill in subsequent period,then in the case of study,the performed based on the accounting standard and the related literature.The result will be based on reasonable hypothesis when necessary.Due to the unique nature of goodwill,the reasons for possible impairment of goodwill and the process of impairment test will also be discussed.Previous research in our country are based on the recognition of goodwill by comparing the purchase method and the equity method.In addition,for the subsequent measurement of goodwill,many literature use regression analysis to build a model to study goodwill.This paper,however,will use a case to access the risk caused by the impairment of goodwill,this research will focus on the subsequent period of goodwill that may lead to the huge impairment of goodwill under the new accounting standard in our country.In the case study,it is not difficult to see that the subsequent measurement of goodwill,especially the reporting process in the annual report and the disclosure of non-financial information is of great importance in the current economic background.At the end of the article,we made some suggestions on the impairment test and the control of risk of the M&A purchased goodwill,which have practical implications for the improvement of current accounting standards of goodwill in China.