Research On The Correlation Between The Impairment Of Corporate Goodwill And Stock Price

The rapid development of the economy has brought about increasingly fierce market competition and continuous innovation of the company’s business model.With the changes in the economy and the continuous upgrading of the industry,enterprises are based on achieving rapid expansion of scale,obtaining strategic opportunities,exerting synergies,and improving management efficiency.For other purposes,they often meet their own rapid development needs through mergers and acquisitions.In recent years,the number of companies that have joined the wave of mergers and acquisitions has increased The goodwill generated by mergers as an intangible asset has become larger and larger,accounting for the company’s total assets.The proportion of it is also increasing,and it has gradually become the focus of attention of corporate management and investors.At the same time,the subsequent accounting treatment of the merger of goodwill has also become an important issue in accounting theory and a hot topic in the capital market.After the implementation of the new accounting standards,the subsequent measurement of goodwill adopts the method of impairment testing.It can be seen from the relevant literature at home and abroad that at present scholars mainly define the concept of goodwill impairment as the following two types:first,The impairment of goodwill truly reflects the decline of the company’s excess profitability in the future;second,the impairment of goodwill reflects the earnings management behavior of the company’s management.Subjectivity and objective complexity are characteristics that cannot be ignored in the impairment test of goodwill.Since the impairment test of goodwill is still lacking a unified and standardized estimation method,it is impossible to determine whether the goodwill impairment information is really credible Therefore,investors and other information users will pay special attention to whether they reflect the company’s true future earnings when analyzing the data of goodwill impairment.The value of the company is mainly reflected in the price of equity securities,and investors are also very concerned about it.This article intends to study the correlation between goodwill impairment and stock prices and its influencing factors,hoping to provide reference value for users of the statement Of goodwill impairment information.In order to deeply analyze the correlation between the impairment of goodwill and stock prices,this article introduces adjustment variables to discuss the financial situation and the impact of internal and external control mechanisms on the correlation.First,it summarizes the meaning of goodwill and goodwill impairment;second,it summarizes the relevant theories related to the research,collates domestic and foreign literature on goodwill impairment,and analyzes the impact of goodwill impairment on stock prices on the theoretical basis The mechanism of action;then,using Chinese A-share listed companies from 2007 to 2018 as a sample,introducing other control variables and moderating variables on the basis of the price model for empirical testing.The empirical results show that:(1)There is a significant negative correlation between the impairment of goodwill and stock prices,indicating that goodwill impairment can cause changes in stock prices to a certain extent;(2)when the company’s financial position is a loss,the business The correlation between the impairment of reputation and the stock price has been reduced,indicating that the company’s earnings management behavior will be recognized by investors,thereby reducing its own use of goodwill impairment information;(3)When the company’s internal control mechanism is complete and efficient At that time,the correlation between the impairment of its goodwill and the stock price is higher;(4)Due to the interference of various other factors,the impact of audit quality on the correlation is not significant.Finally,this article makes the following recommendations:(1)Listed companies,investors,and regulatory authorities should work together to improve the information quality of goodwill impairment.Company managers must carefully design M&A programs,extend the performance commitment period,and take advantage of M&A’s Synergies;(2)Pay attention to the impairment of goodwill of poor financial companies,especially loss-making companies,relevant departments should strengthen norms and guidance,and investors should focus on the company’s financial status;(3)Establish and improve internal and external control mechanisms Listed companies must build an effective internal control system and give full play to the supervisory role of the internal supervisory department.The supervisory department should help and urge the company’s internal governance and at the same time urge the work of third-party audit institutions.