A Study On The Cause Of Goodwill In Zeus Entertinment Merger And Oasis Games

In recent years,there have been frequent mergers and acquisitions in China's capital market,and the goodwill of mergers and acquisitions has increased significantly at the same time,reaching nearly1.45 trillion yuan in the book value of goodwill in the third quarter of2018.However,the accumulation of huge goodwill in the market,people began to be wary of the huge goodwill once the impairment will cause instability.At the end of the 18 th century,China securities regulatory commission began to prompt the risk of goodwill impairment.In the beginning of the 19 th century,the "lightning storm" trend of a-share goodwill occurred.China's ministry of finance discussed whether goodwill impairment or amortization.This paper selects goodwill "thunder" the first tianshen entertainment merger fantasy travel plan to draw goodwill impairment as an example,through the analysis of the formation process of goodwill,analysis of the cause of huge impairment,a brief analysis of the consequences of goodwill impairment,and accordingly put forward the corresponding prevention Suggestions.Why is a company that used to make billions suddenly losing nearly$7 billion? Goodwill impairment why "thunder" ? After a brief introduction of relevant literature,theories and cases,this paper analyzes the cause and effect of goodwill impairment.Firstly,the goodwill was initially confirmed to be inflated,which was embodied in the following aspects: first,tianshen entertainment was too optimistic about the future market and failed to find many risks in the game industry;Second,theexpectation of the acquired party is too high for hyatt travel's off-balance sheet intangible assets,and it fails to notice some defects of hyatt travel's off-balance sheet intangible assets.Thirdly,the valuation confirms the existence of technical defects,and the selection of data is too subjective and inconsistent with the actual situation.Fourth,the performance commitment is inflated,driving the formation of premium.The high initial goodwill left pressure on the subsequent measurement of goodwill.Once the profit of the underlying asset was slightly insufficient,it was easy to have a huge impairment.Secondly,the paper points out that the subsequent measurement policy of goodwill may be changed to the expectation of amortization and the performance commitment can not be achieved,so the accounting treatment method of "taking a big bath" becomes a pair of invisible pushing hands,promoting the god entertainment to plan and draw a huge amount of goodwill impairment.The influence of many factors makes the god entertainment plan to raise a huge amount of goodwill impairment.Thirdly,the paper briefly analyzes the consequences of huge goodwill impairment :(1)the impairment of goodwill increases the pressure of enterprise debt repayment;(2)influence performance;(3)impairment has a negative impact on the stock price.Finally,based on the cause and effect of huge goodwill impairment in the case,general Suggestions are proposed from the perspectives of enterprises,regulatory authorities and the revision of standards.First,enterprises should carefully confirm goodwill and optimize performance commitment plans.Second,the regulatory authorities should strengthen the disclosure of goodwill related information and the supervision of the evaluation agencies;Thirdly,the criteria can be optimized based on the experience of foreign mature capital markets,and the use of evaluationtechniques and goodwill impairment procedures can be standardized.