Goodwill Information Disclosure And Goodwill Impairment Behavior

With the merger and acquisition boom,the already scarce high-quality targets in the market are more popular.In order to acquire high-quality targets through merger and acquisition,high premium transactions are a frequent occurrence and high goodwill is generated.Huge goodwill has become suspended above the heads of the listed company,"the sword of Damocles" goodwill impairment risk is always accompanied by the company.The company's future business direction is not easy to predict and there is great uncertainty.The huge amount of goodwill of the target company is likely to be seriously reduced,which brings a large risk of goodwill impairment to the acquirer.Since 2017,a large-scale outbreak of goodwill impairment risk,Anhui Sheng Yun environment-protection group,Zhong Shan broad-ocean motor,Human well Healthcare,and many other company goodwill ray,scouting for impairment,the stability of capital markets has brought great negative impact,especially when in a lack of effective restriction system and capital market environment of information opaque,goodwill foam once disappear,will damage the interests of small and medium shareholders,investors' confidence and market stability and will not be affected.The communication channels between the company and external investors are not smooth enough,and the goodwill information disclosed to the public is not enough to support the external investors to make a correct and objective judgment,and then when the company conducts the impairment of concentrated goodwill,the outside investors are unprepared and their interests are damaged.Therefore,it is necessary to follow the domestic M&A boom and explore the relationship between the disclosure of goodwill information and the impairment of goodwill from the perspective of goodwill information disclosure.Firstly,this paper combs and analyzes the elasticity of accounting standards for goodwill,the impairment of goodwill and the disclosure of information through literature research,and establishes the theoretical analysis framework of "elasticity of standards--the disclosure of goodwill information--the impairment of goodwill".Secondly,it illustrates the feasibility of comparative study between them,and USES case analysis to summarize the general situation of UniTTEC and Jia Wei Renewable Energy's merger and acquisition,and the general situation of goodwill impairment after the end of performance commitment period,and makes a comparison to explore the causes of goodwill impairment.Furthermore,the comparison of goodwill disclosure information between the two companies on the purchase date and the subsequent measurement points during the performance commitment period and the positive and negative information conveyed by the short-term market reaction of UniTTEC and Jia Wei Renewable Energy new to the goodwill impairment point after the performance commitment period are analyzed to judge whether there is any delay in the disclosure of goodwill impairment;The same M&A starting point,the same performance completion,different goodwill information disclosure profiles ultimately lead to the difference in goodwill impairment behavior after the end of the performance commitment period.Finally,it is further analyzed that the existence of the elasticity of accounting standards is the deep-level reason that leads to the inconsistency of the goodwill information disclosure of the two companies after the completion of the merger and acquisition transaction,so as to verify the functional relationship of "the elasticity of standards--the disclosure of goodwill information--the impairment of goodwill".Through the comparative study of theoretical analysis and case,the following conclusions can provide experience for medium and small investors and regulators:goodwill disclosure commitment period for performance company,the acquired company audit reports of listed companies after the expiration of the commitment to focus on the possibility of goodwill impairment is lower than the possibility of earnings management is lower;The key parameters in the goodwill impairment test are basically consistent with the early stage of the merger and acquisition,which conveys a positive signal of practical identity,and the probability of concentrated goodwill impairment is lower.The appearance of impairment of goodwill but deferred to the performance commitment period after the disclosure is prepared to concentrate the impairment of goodwill performance.In addition,it is suggested that if the accounting standard setters,merger and acquisition companies and regulatory authorities want to purify the capital market,they should make joint efforts to improve the market efficiency,reduce the unreasonable goodwill impairment behavior of companies,and safeguard the interests of small and medium-sized investors.