A Study On The Goodwill Of Enterprise Merger And Acquisition And Its Impairment

With China's market becoming more and more active,mergers and acquisitions of listed companies have become a normalization.In recent years,the number of mergers and acquisitions and the amount of M&A transactions in China have been accelerating growth.In such an economic situation,a series of problems arising from mergers and acquisitions are often followed.Among them,more typical is the large amount of goodwill recognized by enterprises in mergers and acquisitions,which has become a double-edged sword on the top of enterprises.The recognition of large amount of goodwill means that the target enterprises will have higher earning ability in the future,and will have some synergistic effect with the owners and enterprises.However,it has been proved by practice that the recognition of large business reputation is usually attached to the performance commitment and compensation agreement as security.In recent years,more and more cases of the performance commitment of the M&A enterprises have not reached the standard,and the profits from the enterprises are deviating from the expectations,forcing the enterprises to reduce the value of business reputation in the future.The higher the amount of goodwill,the greater the risk of potential impairment,and the greater the impact of the proposed impairment on corporate profits.Based on this practical significance,this paper first combs the relevant research literature,and expounds the related concepts and theories of M&A and goodwill.Secondly,this paper selects the high premium purchase of an Po victory as a case study.Through the financial indicators and the transactions between the two management layers before the merger and reorganization,this paper analyzes the reasonable high valuation of the enterprise with the main enterprise and the enterprise to the standard.The cause of the victory;analysis of the impact of the reduction of large business reputation by Gai;finally,through the study of the high premium merger and acquisition,it is found that high goodwill does not necessarily bring high returns to the enterprise;the failure of the performance commitment becomes the sufficient condition for the depreciation of the goodwill;the loss of huge goodwill will damage the interests of the small and medium investors..Therefore,the paper puts forward relevant suggestions:a reasonable evaluation of the value of the underlying assets,the rational recognition of goodwill,the suppression of unreasonable high premium transactions and high performance commitments in the merger and acquisition;goodwill should be used to reduce the risk of reputation reduction by the follow-up measurement combined with amortization and impairment,and the supervisor should strengthen the supervision of the capital market.We should take necessary measures to protect the interests of small and medium-sized investors.