On The Problems And Countermeasures Of Goodwill Impairment Of Listed Companies

Under the new economic normal,mergers and acquisitions have become one of the most important ways for listed companies in China to seek transformation and upgrading.During the period from 2012 to 2014,China introduced a series of favorable policies to encourage mergers and acquisitions.Under the background,there was a boom in mergers and acquisitions in China's capital market from 2014 to 2016.In order to achieve the strategic transformation and diversified operations,companies have carried out outreach mergers and acquisitions,and at the same time,it has accumulated a huge amount of goodwill bubble.Although from 2016 onwards,China's regulation of mergers and acquisitions has gradually tightened,the numbers of mergers and acquisitions began to decrease.However,the mergers and acquisitions boom from 2014 to 2016 left many "sequels",and the goodwill impairment is one of the serious "sequels".In 2017,as the performance commitments began to expire,the problem of the target company's performance commitments not meeting expectations and the performance after the performance commitment period declining began to appear,the problem of goodwill impairment became more and more serious.As the accounting standards for enterprises have left a large amount of autonomy for the company on the initial confirmation of goodwill and the subsequent measurement of goodwill,there are two extreme phenomena in the provision of goodwill impairment of listed companies,or to mention or reduce the goodwill impairment,or to deduct a large amount of goodwill impairment,which seriously affects the quality of accounting information and the interests of investors.Therefore,to investigate the problems and its countermeasures of goodwill impairment is very necessary.Goodwill essentially refers to the potential economic value of being able to bring excess profits to the company in the future.The real goodwill impairment provision is an important indicator that indicates the company's future profitability decline.The paper takes case analysis method as the research method to analyze the problems of the goodwill impairment of Steyr and attempts to propose countermeasures to deal with the problems of goodwill impairment.Firstly,it introduces the background of the case,expounds the initial confirmation process of Steyr's goodwill and the accrual of goodwill impairment.Secondly,it analyzes the problems of Steyr's goodwill impairment,mainly including the initial recognition overestimation of goodwill,the impairment of goodwill,and the insufficient disclosure of information about goodwill impairment.The problem is that the provision for the impairment of the goodwill of Steyr exists to avoid the risk management of earnings from delisting.In addition,the introduction of the system amortization method restates Steyr's net profit.Under the system amortization method,Steyr's net profits in 2014 and 2015 are both negative,which is different from the net profits under the impairment test method.In the actual situation of 2014 profit and loss in 2015,it is considered that the earnings management problem brought about by the impairment test method deviates from the original intention of reflecting the economic essence of goodwill,and the system amortization method can effectively reduce the subjective judgment space of management.Through the study of this case,the paper has drawn the necessity of solving the problem of goodwill impairment.Therefore,countermeasures that can be considered in response to the impairment of goodwill are proposed.First,the initial measurement of goodwill should be regulated.By strengthening the responsibility of the asset assessment agency,the parameters applied in the valuation process should be reasonably confirmed,and the synergistic effect of mergers and acquisitions should be rationally analyzed.And measures to strengthen the rationality of performance commitments to avoid overestimation of initial goodwill;Second,to improve the subsequent measurement of goodwill,we can explore the combination of system amortization method and impairment test method,to reduce enterprises' using of goodwill impairment to control the profit management space of profit;Third,to strengthen the disclosure of information about the goodwill impairment,the regulatory body should further standardize the disclosure of information about goodwill impairment,and improve the reliability of accounting information.