WALVAX BIOTECHNOLOGY CO.LTD Net Goodwill For Earnings Management Case Studies

In recent years,the merger and reorganization of capital markets has been acting,and the goodwill of A shares has been increasing explosively.The 2017 annual supervision report of the listed companies' annual accounting report pointed out that listed companies didn't strictly perform the implementation of corporate accounting standards and information disclosure about goodwill and non-recurring profit and loss,adjust their profit by assets impairment and depreciation preparation returns.Based on relevant theories,accounting standards and regulatory requirements,this paper selects WALVAX BIOTECHNOLOGY CO.LTD as research object,summarize the formation and the reduction of the company's goodwill.By analyzing the relationship among the net value of the company's goodwill,the non-recurring profit and loss,net profit,it finds that the trend and fluctuation of sales gross profit margin and sales net profit rate are different from similar private vaccine companies.This paper analyzes the case and finds that the company reduces the net value of goodwill by using the method of deducting goodwill impairment loss and disposing of subsidiaries in different years,and presents it in the form of loss or income as part of non-recurring gains and losses.Changes in net worth value through non-recurring gains and losses,amplify the company's book net profit or net loss,and even affect earnings or losses.These are based on the lack of rigor in the accounting process of the company's goodwill,thus regulating the company's profits and realizing the need for housing.In combination with the increase or decrease in stock information and the need to repeatedly correct the performance forecast or performance report time point,it is found that some executives have the advantage of using internal information,low buy and sell,take a lot of cash,and seek personal interests.Finally,the article makes suggestions on goodwill net value earnings management of case company from perspectives of M&A target capital,integrated management ability,concern about goodwill fluctuation,strengthening internal control and shareholder restraint,and from the three aspects of investors,regulatory authorities and standard setters,it suggest relevant measures for preventing the risk of listed companies.