The "Bubble" Of Film And TV Industry's Goodwill

With the development of our country's economy and the prosperity of capital market,more and more listed companies choose mergers and acquisitions to expand their industries,and the transaction price in capital market also rises.Since 2013,the share mergers and acquisitions of listed companies have formed a "blowout" growth,both the number of transactions and the total amount of transactions have increased rapidly,and a large number of mergers and acquisitions have formed a large number of goodwill on account.The film and television industry is particularly prominent.In just a few years,the total goodwill of the film and television industry has increased more than five times.The proportion of goodwill in net assets has also increased from less than 5% in 2013 to 30.2% in 2017.It can not bring over earnings to the enterprise or bring profits to the enterprise,but it is included in the value of goodwill.We call it the goodwill "bubble".When the goodwill is not recognized,the value of goodwill will be reduced when it is formed.It will make the book value of goodwill greater than its real value,like foam.Only when goodwill bubbles are excluded from goodwill to return to its true value,can the data of listed company's financial statements be more accurate.As the proportion of goodwill in the film and television industry is increasing,the measurement accuracy of goodwill has a greater impact on the accuracy of financial data of Listed Companies in the film and television industry.Huayi Brothers,as the first listed private enterprise in the film and television industry,had a goodwill balance of 3.047 billion yuan by December 31,2017,accounting for 31.54% of its net assets and 3.07 times its net profit in2017.Huayi Brothers has invested a large number of companies since 2013.Among them,Huayi Brothers acquired 70% of the shares of Zhejiang Dongyang Meila Media Co.,Ltd.on December 9,2015,with a premium of 298 times,far exceeding the industry average.When the trading intention was confirmed,Dongyang Meila had just established no previous business and its net assets were negative.After the transaction,a total of 1,046.5 billion yuan of goodwill was confirmed,accounting for 34.35% of the total book value of its existing goodwill.How does the goodwill bubble come from the bubble in goodwill? What is the root cause of Huayi Brothers' goodwill bubble? How can we prevent the formation of goodwill bubbles or exclude the goodwill bubble that has been generated,and let goodwill return to itsoriginal value? With these questions,this paper takes Huayi Brothers' merger and acquisition of Dongyang Meila as an example for in-depth study.Because of the intangible and complex nature of goodwill,the existence of goodwill bubbles can not be directly measured.In this paper,through analyzing the goodwill confirmation process of mergers and acquisitions cases,we explore the behavior that does not conform to the norms and norms in the confirmation operation of goodwill brothers,in order to verify the existence of goodwill foam,and study the impact of its goodwill foam on the Huayi Brothers financial statements,and discuss the goodwill bubble of Huayi Brothers.The direct causes and underlying causes of bubbles are discussed,further discussions are made on the formation and elimination of goodwill bubbles formed by goodwill bubbles.This paper summarizes the theoretical knowledge related to merged goodwill in the process of research,including the domestic and foreign research on the methods of goodwill recognition and impairment,combs the historical development of the follow-up measurement of goodwill,combines the theory of goodwill with the relevant provisions of goodwill,and takes the business characteristics and asset nature of the film and television industry as the core,carries out in-depth analysis of the case.Through the study,we found that there was a failure to comply with the norms and norms in the acquisition of Dongyang Meira goodwill by Huayi Brothers.When goodwill was confirmed,Huayi Brothers mainly increased the cost of acquisition and acquisition,and confirmed the purchase date in advance,and recognized the fair value of the net assets of the acquired enterprises to reduce the fair value of the net assets purchased by the acquired companies.To achieve the purpose of influencing the net profit of Dongyang Meila and Huayi Brothers in the following period.The high goodwill phenomenon of Huayi Brothers is the epitome of the listed companies in the film and television industry,which reflects that Huayi Brothers formed an extension growth dependence in a series of mergers and acquisitions.The goodwill bubble is a by-product of being forced to buy performance.This paper also explores the formation and institutional perspective of preventing goodwill bubbles from an enterprise perspective,and how to eliminate goodwill bubbles after the formation of goodwill bubbles.Finally,in view of the above problems,this paper puts forward suggestions on three levels:listed companies,regulatory authorities and standards management departments.