| With the continuous development of the economy,the capital market is becoming more and more mature,and the extensional development has become an important way for the rapid expansion of Chinese enterprises.Under the background of the government’s proposal to establish a sound modern cultural market system,transform and upgrade traditional enterprises,and seek rapid development,the mergers and acquisitions related to cultural media enterprises have increased significantly.However,as a light asset enterprise,cultural media companies usually evaluate the results in the M&A transaction.As the basis of the pricing of the target enterprise,the acquisition party has formed a huge amount of goodwill after the merger,and it faces the problem of impairment of goodwill.Therefore,it is of great practical significance to explore the reasons for the formation of goodwill in corporate mergers and acquisitions,the factors affecting the risk of goodwill impairment and the precautionary measures for the impairment risk of goodwill.This paper takes LianTtonics merging with Time Share Media as an example to study the preventive effect of the valuation adjustment mechanism on the risk of impairment of the acquirer’s goodwill.Firstly,it introduces the basic process of merger and acquisition,and clarifies the key role of valuation and valuation adjustment mechanism design in merger and acquisition negotiation stage.Then,it introduces the development history of merger and acquisition in China,the current A-share market goodwill and the impairment of goodwill.The basic status quo and the application of the valuation adjustment mechanism;Finally,the analysis of the LianTtonics merging with Time Share Media from three aspects:(1)The cause of the huge goodwill of LianTtonics;(2)Factors affecting the impairment risk of goodwill of LianTtonics;(3)The mechanism for preventing the risk of goodwill from the valuation adjustment mechanism.The case study shows that:(1)In terms of goodwill formation,the choice of time-sharing media valuation method in merger and acquisition is the basis for the formation of LianTtonics’ goodwill.In addition,the industry characteristics and market merger premium will also impact LianTtonics scale of goodwill;(2)In terms of the impairment of goodwill,whether merging price is reasonable will have an important impact on the impairment risk of goodwill.After the completion of transaction,the operation of TimeShare Media is a key factor affecting the impairment risk of goodwill.In addition,the completion of performance commitments will also have an impact on it;(3)In the preventing goodwill impairment risks,performance compensation schemes and impairment test schemes complement each other,which can prevent the risk of goodwill impairment of the acquirer during the gambling period to a certain extent,but cannot prevent the other negative impacts on the acquirer due to substandard corporate performance.In order to prevent the risk of goodwill impairment of the acquirer after the merger,the following points should be noted:(1)Mergers and acquisitions of cultural media enterprises want to minimize the risk of goodwill impairment,not only need to work hard before the merger,but also pay attention to Postmerger integration and the operation of the acquired party;(2)The valuation of the target company should be based on a reasonable valuation method,control the goodwill from the source,reduce the risk of goodwill impairment;(3)Reasonable setting of the terms of the valuation adjustment mechanism is the basis for preventing the risk of goodwill impairment. |
