Research On The Impact Of Performance Compensation Commitment On Goodwill Impairment In M&A And Reorganization

In May 2008,the "Regulations on the Management of Major Asset Restructuring of Listed Companies" issued by the China Securities Regulatory Commission began to introduce performance compensation commitments into mergers and acquisitions in legal form.With the development of market demand,M&A transactions were in full swing in China's capital market in 2013 Ongoing,to help companies quickly increase their own power to occupy market share,the government is also supporting the call for mergers and acquisitions between key industries,so this wave of mergers and acquisitions will continue to exist in the capital market.Since mergers and acquisitions are a high-risk,asymmetric information,and will also generate goodwill,an asset-light activity that may bring risks to companies in the future,the existence of performance compensation commitments has weakened the relationship between large shareholders and small shareholders.Information asymmetry has protected the interests of small and medium shareholders,and the frequency of citations for mergers and acquisitions has continued to increase since its rise.According to WIND statistics,there have been 1,704 major asset reorganizations that were successfully traded in the five years from 2014 to 2018,while 2018 Listed companies have completed 156 major asset restructurings,including 149 performance compensation commitment clauses,the ratio reached 95%.In order to improve the evaluation value,the target party is willing to make high-performance commitments.At the same time,the occurrence of high-performance commitments has contributed to the formation of M&A premiums,making the original huge amount of goodwill even worse,and the goodwill is hidden behind the future reduction of accrued goodwill.Value risk.Under the guidance of information asymmetry theory,principal-agent theory,signal transmission theory,synergy effect theory and option value theory,the Tobit regression model is systematically used in this paper,using listed companies' 2015-2018 SME and GEM M&A events as samples Conduct empirical analysis,based on the assumption that performance compensation commitments are different,from the perspective of mergers and acquisitions,the performance compensation commitments are subdivided into the signing of performance commitments,the impact of single-term commitments on the acquisition of goodwill impairment and related parties How the party restructuring adjusts the relationship between performance commitments and goodwill impairment,and also considers that listed companies may have a lag when accruing goodwill impairment.The results of the study found that there is a significant negative correlation between the signing of performance compensation commitments and goodwill impairment,but for companies that have signed performance compensation commitments,the single-period performance does not reach the promised profit than the on-time completion of the impairment of goodwill.Mostly,as for the introduction of performance compensation commitment agreements in non-associated reorganization mergers and acquisitions,the risks caused by the impairment of goodwill can be avoided,and there is indeed a case where the listed company does not accrue the impairment of goodwill.Based on the above conclusions,this article finds an important influencing factor for the current huge amount of goodwill impairment,cracks one of the reasons for the continuous crash,and reminds listed companies to objectively and timely disclose information about goodwill and goodwill impairment.Pay attention to checking the situation of delaying the depreciation of goodwill impairment.At the same time,it also found that the application of the performance compensation commitment system in mergers and acquisitions will not continue to have a positive effect,so that the regulatory authorities are aware of the shortcomings of this system to improve on this basis.