Goodwill Impairment Study Of Philisense Company

The Securities and Futures Commission issued in November 2018 the “Accounting Regulatory Risk Reminder No.8—Goodwill Impairment”,combining with the outstanding problems found in the annual inspection,the accounting supervision risks are suggested from three aspects: the accounting treatment and information disclosure of goodwill impairment,the auditing of goodwill impairment and the assessment of goodwill impairment.On January 4,2019,the accounting standards board of the ministry of finance discussed the issue of changing the subsequent measurement principle based on the concentrated risk caused by the impairment of goodwill and believed that amortization could achieve the goal of zero impairment of goodwill better than impairment.In order to avoid the impact of periodic amortization on the profits,the listed company decided to recognize a large one-time impairment loss of goodwill before changing the subsequent measurement principle.Therefore,the discussion on goodwill impairment and amortization by the ministry of finance not only failed to improve the fluctuation of profit and loss caused by the centralized calculation and withdrawal of goodwill impairment of listed companies,but led to a larger increase of the recognized goodwill impairment loss in 2018,which caused reflection on whether there are problems in the practical application of goodwill impairment of listed companies.In its 2018 annual report,Philisense disclosed that it recognized a goodwill impairment loss of 1.5 billion yuan in 2018,resulting in a net profit of-1.9 billion yuan in 2018.At the end of 2018,it was confirmed that a large amount of goodwill impairment losses has attracted the attention of the CSRC.The CSRC has sent a total of four followup letters,inquiry letters,and supervision letters for detailed reply explanations.Therefore,this article conducts a detailed analysis of the impairment of the goodwill of Philisense and studies the following three issues:(1)In the process of initial recognition of goodwill,whether the recognition of huge amount of goodwill leads to the subsequent large amount of impairment of goodwill is the influencing factor.(2)in the process of subsequent measurement of goodwill,it is not timely identified whether the signs of impairment of goodwill are the influencing factors that lead to the subsequent concentrated provision for impairment of goodwill.(3)how to solve the problems of goodwill impairment from two aspects: standards and practices.After detailed analysis,found in the process of reputation of initial recognition,the company existing combination costs overvalued or not fully recognize the problem of identifiable intangible assets lead to huge goodwill initial recognition,when companies affected by the internal and external factors make large goodwill impairment provision,so huge goodwill of subsequent provision is confirmed the influence factors of big goodwill impairment loss.In the process of goodwill subsequent measurement,the existing signs of goodwill impairment are not recognized in time,which leads to the large amount of goodwill impairment provision in the subsequent calculation and withdrawal.In order to solve the problem of goodwill impairment,it is suggested to establish the steps for identifying identifiable intangible assets and the standard for comprehensively identifying the signs of goodwill impairment in the standards.It is suggested that listed companies should carry out the goodwill impairment test in strict accordance with the requirements of accounting standards and disclose the information related to goodwill and goodwill impairment in detail in practice.