The Study Of Goodwill Impairments After Game Industry Listed Company ZQGAME's M&A

With the lasting development of economic and further advance of the reform of the cultural system,game industry entered a golden period of development.In 2013,China's game industry set off a wave of mergers and acquisitions that have the same characteristic is the “high merger premium”.Under the high merger premium,goodwill shows.This paper uses the case of ZQgame as case study to explore the goodwill impairments after game industry listed companies' M&A.This paper discusses the emerged problem of goodwill impairments and hopes to give suggestions from case study and data analysis,in order to reduce the risks caused by goodwill impairments.According to the exploring of background of game industry,the study of literature and accounting standard to find the definition of acquisition and goodwill,the confirmation and follow-up measurement of goodwill.And then emphasis the case of ZQgame and offer advises from the way of acquisition,promised performance,the way of payment and follow-ups after acquisition.At last,expand to game industry,to compare ZQgame with 10 other acquisition cases and offer summary and suggestions.This paper also raises some weakness of goodwill impairment test executed in China and make compare between goodwill impairment and goodwill amortization.This paper draws a conclusion that though the analysis of data,the goodwill impairment is closer to the real share price than goodwill amortization.But there are still much weakness in Chinese goodwill impairment,such as no single standard on identified asset unit,difficulty on confirm of recoverable amount.It is hard to handle,lack of information disclosure and might be used to as a tool to control earnings.Suggestion: combining goodwill impairment and goodwill amortization,detailing the indicators of impairment test,demanding companies to publish goodwill impairment test in announcement,and strengthening the regulation on follow-up dispose of goodwill.During the acquisition,companies should do follows before and after acquisition: do the research,confirm the way of acquisition,calmly faced the promised performance,make the way of payment reasonable,negotiate the extender of agreement and pay lasting attention to the acquiee.So companies can reduce the risk of goodwill impairment.