Study On The Goodwill Devaluation Of Listed Companies

With the continuous development and improvement of China’s capital market,mergers and acquisitions of listed companies are becoming more and more common.Especially in recent years,the number of mergers and acquisitions of listed companies and the amount of transactions have repeatedly reached new heights.At the same time,a series of problems occur frequently in the process of M&A and reorganization of listed companies.Among these problems,the more typical is the confirmation of large goodwill in the process of merger and acquisition.For listed companies,the recognition of large goodwill is a "double-edged sword".On the one hand,it may mean that mergers and acquisitions will bring higher returns to enterprises and achieve synergy between the two sides.On the other hand,accompanied by goodwill,there are additional performance commitments and compensation agreements.Once the performance is not achieved,it will bring the risk of goodwill impairment.In recent years,due to the performance failure to meet the standards,the situation of the company’s impairment of goodwill in the following fiscal year has gradually increased.The impairment of goodwill of listed companies will directly affect the company’s performance and stock price fluctuation,which will bring huge impact to the capital market itself.Therefore,Goodwill issue has become the most important issue in the current capital market.Under this background,through the analysis of the formation and impairment of merger goodwill in China’s capital market,this paper draws a typical case in recent years,that is,the merger and acquisition of Shenzhen Optimum Nano Company by J&R Optimum Energy,Shaanxi Province.This case is sorted out in detail from a series of mergers and acquisitions to the impairment of goodwill,focusing on the formation of the huge goodwill of the case company and the reasons for its impairment,and further analyzing the economic consequences of the impairment of goodwill to the company.The study finds that the risk of goodwill impairment increases and the failure of performance commitment is also the main incentive to calculate goodwill impairment in high premium mergers and acquisitions.Finally,in view of the whole process of merger and acquisition reorganization,the paper puts forward relevant suggestions to enterprises and regulators.