Study On The Goodwill Impairment And Economic Consequences Of Tianshen Entertainment M&A Project

In recent years,China's economic structure is gradually adjusting,many listed companies adjust the structure of enterprises through M & A,which makes the number and amount of M & a gradually increase,but M & A also brings a series of problems,the most typical is the recognition of goodwill impairment.For listed companies,goodwill is a double-edged sword.On the one hand,although M & A has paid a high premium to confirm a large amount of goodwill,if it can achieve the strategic objectives in advance to achieve synergy,it will bring high profits to enterprises;on the other hand,now M & A will sign performance compensation agreements to protect the rights and interests of the acquirers,which will lead to the fact that once the acquired enterprises have not The completion of performance commitment will make the acquirer have the risk of goodwill impairment,which will affect the net profit.According to recent statistics,the number and amount of goodwill impairment withdrawn by Listed Companies in China has increased significantly year by year,most of which are due to the failure of performance commitment.This situation broke out completely in 2018.If a company withdraws a large amount of goodwill impairment provision,it will affect performance and financial data,and even bring stock price fluctuations,making investors withdraw from the capital market.Under this background,this paper studies and analyzes Tianshen entertainment,the enterprise with the most impairment of goodwill in 2018.Before 2007,the old accounting standards were adopted in our country,and the amortization method was adopted for the subsequent measurement of goodwill,just like the depreciation of assets,which was amortized inward in a certain year.In 2007,a new accounting standard was issued,which has been converged with international accounting standards.The subsequent measurement of goodwill was changed from amortization method to impairment test.In January 2019,the Accounting Standards Committee under the Ministry of Finance issued the Advisory Committee's feedback on the accounting standards consultation.After discussion,the experts thought that the current subsequent measurement method of goodwill was more appropriate from impairment test to amortization method,but up to now,no normal standard has been formed.Therefore,there are still variables in the subsequent measurement of goodwill.In this paper,Tianshen entertainment company is selected as the research object.First of all,through combing the formation of its huge goodwill and the related facts of goodwill impairment,we find that there are the following problems in the treatment of goodwill impairment: the motivation of earnings management,the imperfect measurement method,the high commitment of the performance of the merger and acquisition company,and then analyze the serious economic consequences,such as falling stock price,heavy debt repayment pressure,etc.Finally,in view of the above problems,the following suggestions are put forward: clear development direction,rational M & A;correct view of performance commitment and compensation agreement;strengthen supervision and punishment,focus on high premium M & A enterprises;improve the follow-up measurement methods of evaluation and goodwill.