Research On Blue Focus Mergers And Goodwill Impairment

Along with globalization,mergers and reorganizations of enterprises are becoming frequent,within which goodwill is always involved,and Goodwill is playing role of a larger proportion.Since 2017,the sudden impairment of goodwill of numerous listed companies led to a sharp drop in their performance.At the end of 2018,CASC also issued a consultation on "goodwill and its impairment",and most members agreed to the amortization method of writing down the book value of goodwill to zero.There is a large space for discussion on the way of goodwill subsequent treatment.Theories related to goodwill and its impact on financial indicators have been summarized as a foundation of this thesis.M&A cases of BlueFocus Group in the past ten years are chosen,examined and analyzed under the impairment test method.System amortization method is also introduced into this thesis for simulation test,trying to compare the two goodwill treatment methods from different perspectives.Hence,it is believed that in the initial recognition level,the high premium merger is the cause of huge impairment of goodwill;In the follow-up measurement level,detailed implementations of accounting standards on impairment test for enterprises are not clear.Regulators pay insufficient attention to such violations,resulting in the negative impact of goodwill follow-up treatment on enterprise value,plus misuse of impairment test as a tool of earnings management.Yet,the impairment method is more suitable for goodwill treatment in the current market environment,but the method still needs further improvement.It is suggested that(1)the initial recognition of goodwill,including asset evaluation and recognition,should be clearly regulated and standardized.(2)Goodwill impairment test method should be improved with enhanced supervision by authorities.(3)More detailed information related to goodwill should be disclosed,and some voluntary disclosures should be changed to mandatory.For enterprises failing to make required disclosure,corresponding punishment mechanism should be formulated.