Research On The Impact Of Performance Compensation Commitment On Goodwill Impairment In High-premium Mergers And Acquisitions

After the 18 th National Congress of the CPC,a wave of merger and reorganization has been launched in China.With the explosive growth of M&A transactions,the risk of goodwill impairment is increasing.In order to prevent the risk of goodwill impairment caused by high-premium M&A,performance compensation commitment was introduced in most M&A transactions.Reflected in China's capital market,it is the present situation that China has made large-scale provision for goodwill impairment since 2016.Elephant.The reason is that because of the crazy mergers and acquisitions in the early stage,a large number of high performance commitments have emerged,and high valuation mergers and acquisitions have formed high goodwill.Society is also highly concerned about this problem,and calls this kind of problem "three high problems." Therefore,in view of the growing wave of mergers and acquisitions in China,in the face of the risk of goodwill impairment caused by high premium mergers and acquisitions,it is necessary to adopt the perspective of high premium mergers and acquisitions.This paper studies how to set up the performance compensation commitment agreement to prevent the risk of goodwill impairment more reasonably and effectively.Through the method of case study,this paper studies the influence of performance compensation commitment on preventing the risk of goodwill impairment from the perspective of high premium M & A.By selecting the case of Jianrui Woneng's merger and acquisition of Shenzhen Waterma,it is found that the income method used in the merger and acquisition and the information asymmetry in the merger and acquisition will push up the M& A premium,resulting in an increase in the amount of goodwill.Further research shows that performance compensation commitment can not effectively reduce the risk of mergers and acquisitions,and even become an invisible driver of high valuation and high premium,so it can not effectively prevent the goodwill impairment caused by high premium mergers and acquisitions.Finally,this paper summarizes the research in this case and finds out In order to provide experience and reference for perfecting the M & A market in China,this paper puts forward some suggestions on the performance compensation commitment from the point of view of M & A and the relevant regulatory departments.