Research On Impairment Of Goodwill And Economic Consequences Under High-premium Mergers And Acquisitions

In recent years,there has been a typical phenomenon in the securities market – high-value mergers and acquisitions.The high premiums in most M&A events are mainly due to overestimation of the future operating performance of the target companies,the selection of the income method as the final valuation method,and the rush to change the decline in earnings.However,after the high-value merger,the performance of many target companies did not meet expectations,and accompanied by the risk of not being able to complete the performance compensation agreement,these factors will have a negative impact on the performance of the acquirer.Another phenomenon brought about by high-value mergers and acquisitions is that the total value of goodwill in the market has soared,and the corresponding accounting problems have followed.Practice has proved that the recognition and impairment of the merger goodwill,and even disclosure and other accounting matters need to be improved.The rise of the wave of mergers and acquisitions of A-share listed companies,the continuous increase in the book value of goodwill and the negative impact on the listed companies have made the issue of goodwill impairment prominent.Therefore,this paper analyzes the reasons for the depreciation of the merger goodwill and the economic consequences caused by the merger of high-value mergers and acquisitions of Longwen Education to generate high goodwill and then make a large amount of impairment provision.Make relevant recommendations.This paper first adopts the literature research method,and introduces in detail the definition and confirmation of goodwill,the goodwill impairment test and the literature review related to the merger premium and the related theoretical basis,laying the foundation for the subsequent research.Starting from the inside of the acquirer and the target company,combined with relevant information to find out the purpose of M&A and the M&A process,analyze the reasons for the high premium.Then,through in-depth analysis of the cause of the impairment of goodwill,it is found that the initial confirmation of goodwill has a blind overestimation phenomenon.The company's merger and acquisition party Long Wen Education Company has a small scale and unsatisfactory business performance,while the merger consideration exceeds the company's fair value.Tens of times,the confirmed goodwill amount is as high as 2 billion yuan,and its merger premium is very high.As a result of the unsuccessful performance commitments due to poor management of Longwen Education,Qinshang Company made a provision of 460 million yuan in goodwill impairment,resulting in a large loss in net profit,and the stock price plummeted.Finally,the analysis of the economic consequences of the impairment of goodwill by Qinshang shares is analyzed from three aspects: the impact on short-term market response,the impact of financial indicators and EVA performance evaluation.The results of the analysis are summarized and recommendations are made.