The Impact And Countermeasures Of GI Technology’s Goodwill Impairment On Stock Price

Enterprises have adopted mergers and acquisitions to expand their scale and market share in order to accelerate the pace of development and growth,resulting in a rapid increase in corporate mergers and acquisitions.With the outbreak of mergers and acquisitions in the market,the scale of corporate goodwill is also expanding.After the integration time of mergers and acquisitions,the effect of mergers and acquisitions gradually emerges.Many high-value mergers and acquisitions cases have experienced large-scale impairment of goodwill,which has greatly affected the performance of the company.Under the background of the overall downward trend of the market,the abnormal fluctuation of the stock price of the company is intensified,which affects the healthy operation of the market.In order to more accurately understand the current situation of China’s goodwill impairment and put forward effective measures for goodwill supervision and management,this paper analyzes in detail the impact of goodwill impairment loss on stock price fluctuations,and discusses the large amount of impairment of mergers and acquisitions.In response to the abnormal fluctuations in the stock market,the case of GI Technology was selected for analysis,in order to propose effective measures for the management layer to manage and supervise the impairment of the entire market,to prevent stock market turmoil and to protect the interests of small and medium investors.This paper takes case analysis as the research method and selects GI Technology as the case study object to study the impairment of goodwill,the test method of goodwill impairment and the economic consequences after impairment.First,analyze the current scale of impairment of goodwill on the GEM market and the status quo.Secondly,through the research on GI Technology case,after the merger and acquisition of GI Technology,due to the excessive loss of goodwill,the overall process of returning the original price is decided,especially the change of the stock price before and after the original price return,which reflects the enterprise.The response of the impairment loss on the share price;in addition,through the selection and results of the goodwill impairment test disclosed in the two asset assessment reports of the company during the merger and acquisition process,it is understood how the enterprise is impaired by goodwill.Tested vulnerabilities evade regulatory oversight.Through the study of the case,this paper believes that the impairment of goodwill in China needs to strengthen supervision from four aspects.The first is to reduce the impact of subjective factors in the goodwill impairment test,and weaken the earnings management behavior that management may have on goodwill,mainly from three aspects: the identification of asset groups,the selection of discount rate,and the forecast of future cash flow.The re-discussion of the subsequent amortization of goodwill is mainly through comparing the advantages and disadvantages of the two subsequent measurement methods of impairment and amortization,reducing the unpredictability of the impairment test and the economic cost to be paid;strengthening the information of goodwill Disclosure,from the detail level,face the subjective judgment of the entire measurement process of goodwill,make detailed disclosure requirements,strengthen corporate supervision pressure,reduce the abuse of accounting standards;the supervision and audit of the third-party organizations on the goodwill of the enterprise is mainly the operation norms in the professional process of the accounting firm and the asset appraisal institution,strengthening the third-party pressure of the enterprise and ensuring the reliability of information disclosure.