Case Study On Impairment Of Goodwill In Feilo Acoustics Co. LTD

Since entering the 21 st century,China's economic development and social environment have made great progress,which has brought unprecedented competition.Listed companies lacking endogenous growth momentum are facing delisting or even bankruptcy and reorganization.In order to maintain their own competitive advantages in the fierce competition,many companies use mergers and acquisitions to improve their competitiveness,but in the process of mergers and acquisitions,an unidentifiable asset-goodwill.Therefore,the importance of goodwill is gradually being paid attention in the capital market,but there are two branches of goodwill,one of which is self-made goodwill,which is stipulated in the guidelines that it cannot be confirmed,while the other branch has only goodwill for mergers and acquisitions.In recent years,under the "shelter" of the rapid economic growth,China's M & A market has continued to heat up,and the proportion of goodwill in the capital market has become larger and larger.Some target companies with high premium mergers and acquisitions have not achieved the expected results after the merger and acquisition.The company withdrew a huge amount of goodwill impairment,which brought a huge negative impact on the company itself and even the capital market.Why did huge goodwill and provision for impairment of goodwill occur? Now it has become one of the concerns of the people.This article selects two typical high-premium mergers and acquisitions of Beijing Shen'an Investment Group and Havells Malta.This paper will sort out the whole merger process,consider the problems existing in these two mergers and acquisitions,and put forward reasonable suggestions.This article includes four parts: The first part is to explain the research background,research significance,research ideas and methods related to this article,and to provide a strong support for the later analysis part based on the domestic and foreign literature reviews related to goodwill accounting.The second part is a review of the merger and acquisition cases of Feilo audio.Firstly,it introduces the two merger cases of the acquirer and the acquirer,and then tells the process of the merger and the subsequent impact.The third part adoptsthe case analysis method and the quantitative analysis method to analyze the motivation of the merger and acquisition,the causes of the impairment of goodwill,and the doubts about the performance commitment and financial errors in the process of the merger and acquisition,so as to make a comprehensive summary.Then combined with the market environment,the annual report and the audit report of the company were used to analyze the performance of Feilo audio.Specifically,the reasons for the impairment of goodwill in the case are analyzed from the aspects of the overvaluation of the total underlying assets,the setting of performance commitment and the sustainable profitability of the underlying enterprise,and then the effectiveness of the preventive measures for the impairment of goodwill risk should be obtained.The fourth part,based on the results of the case analysis,summarizes the merger cases of Feilo sound and puts forward three Suggestions on the merger.In the second aspect,accounting firms need to adhere to the practice standards for supervision.The regulatory authorities also need to strengthen the punishment for violations and strengthen the disclosure supervision of goodwill impairment information.The third aspect is that the detailed and complete guidelines for goodwill need to be implemented as soon as possible.Through the merger and acquisition of Feilo,this paper makes a comprehensive analysis of the impairment of goodwill in the merger and acquisition,hoping to play a warning role to some extent.However,this paper is only based on data analysis,and the collection channels of objective factor information are limited.The research in some aspects is not in-depth enough,so whether it can be targeted at all industries remains to be studied.