Study On The Goodwill Impairment Of Zeus Entertainment

In recent years,with the expansion of the scale of China’s capital market,listed companies continue to increase the number of mergers and acquisitions.In order to become bigger and stronger,many enterprises,regardless of their own strength,carry out large-scale mergers and acquisitions at an unreasonable high premium,resulting in a large amount of goodwill,which lays great potential for the impairment of goodwill in the later period.As one of the important matters in the preparation and disclosure of financial report,asset impairment is of great importance to the financial statement as a whole.Among them,goodwill impairment especially involves the significant accounting estimation and judgment of the management,which is the top priority of asset impairment.The high goodwill formed in the process of mergers and acquisitions of listed companies has become a matter of great concern in the capital market.This paper selects Dalian Zeus Entertainment Co.,Ltd.(hereinafter referred to as "tianshen Entertainment"),which is the top company in terms of goodwill impairment in 2018 in China,to analyze the whole process from initial recognition of goodwill to subsequent measurement to goodwill impairment and earnings management,in an attempt to provide reasonable suggestions to regulators and listed companies.This paper is divided into five parts:The first part is introduction,mainly introduces the research background and significance of this article,by analyzing the domestic and foreign about the initial recognition of goodwill,the follow-up measurement of goodwill and goodwill and earnings management literature research,and on the basis of the review of the literature of the past,is proposed in this paper,the research ideas,research contents,research methods and main contributions and shortcomings.The second part is the concept definition and theoretical basis.The concepts of goodwill,asset impairment,merger of enterprises under different control and performance commitment are defined respectively.Meanwhile,the theoretical basis of this paper,namely the theory ofsynergies,the theory of enterprise value evaluation and the theory of earnings management,are introduced.The third part is the basic situation of the merger and acquisition of tianshen entertainment.Firstly,it introduces the general situation of the acquirer,the acquirer and the m&a transaction.Secondly,it explores the background and motivation of the merger and acquisition of tianshen entertainment.Furthermore,the paper expounds the generation and impairment of goodwill of god entertainment.Finally,the paper analyzes the influence of goodwill on the performance of tien shen entertainment company.The fourth part is the analysis of the cause of the huge impairment of the goodwill of god entertainment.This part starts from the merger case of tien shen entertainment,analyzes the cause of huge goodwill impairment from the aspects of initial recognition of goodwill,subsequent measurement and earnings management motivation,and supports the conclusion and proposal of the following paper.The fifth part is the conclusion and suggestion.After analysis,this paper holds that high valuation,high premium and high performance commitment are the root causes of the huge impairment of tiandas entertainment’s goodwill.In the follow-up measurement of goodwill,the current standard is not specific enough for impairment test,and the regulatory authorities are not strict enough for the related requirements of goodwill disclosure,which leads to the goodwill impairment test method is often used by enterprises as a tool of earnings management.At the same time,combined with the above conclusions,this part gives Suggestions from the aspects of initial recognition,subsequent measurement and information disclosure of goodwill,aiming to provide certain reference for the formulation of standards,improvement of supervision and promotion of follow-up research.The main innovation of this paper has two aspects.In a new research angle of view,this paper focus is often ignored by people of goodwill this phenomenon of listed companies,combining the reality of the current our country listed company,on the basis of the help of the experts and scholars research,through to the goodwill confirmation and measurement study on the related issues,such as,found that there were problems and put forward the corresponding improvement Suggestions,in order to increase the authenticity and reliablereputation,the users of financial statements for effective decision-making information has strong practical significance.Second,the research method is strong in argumentation.This paper uses a variety of research methods such as case analysis,normative analysis,comparative analysis and trend analysis.By focusing on specific typical cases,this paper makes an in-depth analysis of the real causes of goodwill impairment,discovers the main problems in the impairment process,and puts forward corresponding conclusions and suggestions.