Research On The Accounting Treatment Of Goodwill From The Perspective Of Earnings Management And Financial Stability

According to the current accounting standards system in China,listed companies need to determine whether goodwill will be impaired on the balance sheet date of each year,and once the impairment is withdrawn,it cannot be reversed in the future accounting period.In 2018,hundreds of A-share listed companies suffered a huge performance loss,mainly because many companies failed to fulfill their performance commitments or no longer tried their best to fulfill their commitments for other purposes,resulting in performance decline and goodwill impairment.Even some companies,due to the decline of current performance or the hopeless turnaround,simply withdraw large amount of goodwill impairment in the year of loss,and "bathe" the performance,so as to build momentum for the future performance.In this way,goodwill will seriously damage the interests of shareholders and investors,and may even cause the company's stock price to fall precipitously,damaging financial stability.Therefore,this paper will focus on the current accounting treatment of business reputation,that is,whether the goodwill impairment method will damage the sustainable and healthy development of the capital market in the long term.Whether the accounting treatment of business reputation in China should follow the international accounting standards,continue to use the impairment method,or use the goodwill amortization method.In this paper,medical and pharmaceutical industry and media industry are selected as the research samples,focusing on the research of Shen Datong company,and then analyzing the problems in the follow-up measurement of Goodwill under the current accounting standards in China.From the perspective of earnings management,this paper analyzes the motivation of Shenzhen Datong to use goodwill impairment for earnings management,and finds that compared with amortization method,goodwill impairment test method gives managers more motivation and opportunities for earnings management.From the perspective of financial stability,it is found that the goodwill impairment test method will provide an opportunity for the management to use goodwill for earnings management to take a financial "bath",which is more likely to cause damage to the market economic order,even lead to a serious trust crisis in the financial market,and enhance the risk of stock market crash.The research of this paper is helpful to find out the problems and reasons in the recognition and subsequent measurement of goodwill,and put forward suggestions for improvement.Hope to "give investors a real listed company".Therefore,this paper has practical significance.In addition,at present,there are relatively few literatures about goodwill from both micro(earnings management)and macro(financial stability).The research of this paper is helpful to enrich the theoretical research of the existing goodwill,and has important theoretical significance.