Goodwill Impairment In The Merger And Acquisition Of Zeus Entertainment And Its Countermeasures

Under the new normal of the economy,enterprises have adopted mergers and acquisitions to expand their scale and achieve transformation and upgrading.In the recent merger and acquisition wave,game enterprises have become the target of competition.With the development of the Internet and the popularization of mobile devices,the game industry has entered a high-speed development stage,and the profitability of game enterprises is generally strong.As the game industry belongs to the "asset-light" industry,the acquirer generally does not adopt the asset-value basis method when evaluating the target company,but mostly uses the income method based on the prediction of its future profitability,so high valuation and high premium often occur in mergers and acquisitions,forming a huge amount of goodwill.When the target company's future operation cannot reach the expected performance,the large amount of goodwill confirmed by the acquirer will shrink substantially,resulting in a series of goodwill impairment problems.This paper mainly uses the method of literature analysis,case study and financial index analysis to study and analyze the goodwill impairment of Zeus Entertainment.Firstly,this paper introduces the research background and significance,and uses the literature analysis method to analyze the goodwill literature and merger theories,and summarizes the research results and famous theories of domestic and foreign scholars.Secondly,this paper takes Zeus Entertainment as the case study object,and introduces a series of mergers and acquisitions of the company,as well as the initial confirmation and subsequent measurement of the company's goodwill.Thirdly,the financial index method is used to analyze the impairment of goodwill of the company,including the source of the huge amount of goodwill,the impact of the impairment of goodwill and the reason for the impairment provision of the huge amount of goodwill.Finally,through the analysis of the case,the author puts forward the strategy of how to deal with the huge amount of goodwill impairment.