| In recent years,with the continuous development and improvement of my country’s capital market,my country’s listed companies have ushered in a wave of large-scale mergers and acquisitions,the number of listed companies’ mergers and acquisitions has continued to rise,and transaction amounts have also reached new highs.At the same time,the process of M&A and reorganization of listed companies is accompanied by a series of problems.Among these problems,the more prominent is the accounting treatment of the large amount of goodwill generated in the course of mergers and acquisitions.For listed companies,the recognition of large amounts of goodwill has both advantages and disadvantages.On the one hand,the formation of large amounts of goodwill by M&A is likely to bring benefits to the company,and both parties can play a good synergistic effect;on the other hand,M&A will not only generate goodwill,but also be accompanied by additional performance commitments,In terms of compensation agreements and other terms,once the performance commitment is not met,the enterprise will face the risk of impairment of goodwill.From the situation in recent years,more and more companies have made goodwill impairment provision in the subsequent fiscal year due to the failure to achieve performance standards.The provision of impairment of goodwill by listed companies will directly affect the company’s performance and share price,which will have a huge impact on the capital market and thus affect the net profit of listed companies.Some companies have also suffered huge losses.The higher the amount of goodwill,the greater the potential risk of impairment.The huge impairment of goodwill exploded by a large number of listed companies in Shanghai and Shenzhen in 2018 is a concentrated reflection of this risk.Therefore,the impairment of goodwill has become the most important issue in the current capital market.Nowadays,mergers and acquisitions have become one of the main ways for small and medium-sized board companies to maintain high growth,but the actual situation is that some listed companies in the small and medium-sized board that have high-tech,asset-light and other characteristics are often prone to accumulate huge amounts of goodwill and impairment risks.Keep accumulating.The follow-up measurement of goodwill of Chinese listed companies generally shows signs of insufficient impairment,and this sign is particularly prominent in asset-light companies.The game industry among light asset companies has developed rapidly,with good prospects and highprofits,which has attracted a large amount of capital investment,and the game industry has quickly become a new favorite of M&A companies.However,due to the certain specificity and complexity of the game industry,the risks of mergers and acquisitions in the game industry have gradually emerged,and a large number of failed mergers and acquisitions have emerged,which has attracted the attention of the author.Dalian Tianshen Entertainment Co.,Ltd.(hereinafter referred to as Tianshen Entertainment)is a relatively frequent acquisition in recent years.In recent years,it has acquired the target Fantasy Yueyou,Jiaxing Lewan and other enterprises,and became the number one "storm" of goodwill impairment in 2018.The players are very typical.Under this background,this paper analyzes the reasons for the formation of M&A goodwill and the impairment of the current capital market in my country,and makes a more detailed review of the case of Tenjin Entertainment from the initial measurement of M&A to the impairment of goodwill.The structure of this article is as follows: The meaning and literature review of the first chapter.The second chapter combs the connotation of goodwill and related theories.Chapter 3 introduces the case company’s M&A motivation and confirmation measurement.The fourth chapter focuses on the problems existing in the case of the company’s goodwill impairment,why these problems exist,and the impact of goodwill impairment on the enterprise and the market.Chapter 5 draws conclusions and provides suggestions for solving problems.Through analysis,it was found that Tenjin Entertainment initially confirmed the merged company on the basis of the income method.There were signs of raising goodwill.The merged company was more difficult to complete the performance commitment.The large fluctuation in the amount of profit within three years of the merger also effectively verified the merger.The initial recognition amount of goodwill may be overestimated.In order to achieve performance commitments and reduce the risk of delisting,Tenjin artificially does not accrue or less accrue goodwill.The goodwill asset bubble accumulated during a large number of mergers and acquisitions brings great uncertainties to future performance,and ultimately promotes Tenjin Entertainment conducted a huge amount of goodwill impairment in 2018,and did not disclose the detailed impairment process when accruing goodwill impairment in 2018.Overall,after the performance commitment period ended,the company’s true profitability level was immediately exposed,which immediately detonated the mine with a huge amount of goodwill impairment.In response to these problems,this article gives the following three suggestions: First,the initial confirmation of goodwill shouldfollow the principle of prudence,reduce irrational high-premium mergers and acquisitions.Secondly,it is recommended that the follow-up measurement method use system amortization and impairment testing.This method can effectively prevent information distortion and can better reflect that substance is more important than form.Third,standardize the disclosure of goodwill information,the regulatory department strengthens supervision,and does a good job of "mine clearance".When a company that does not meet its performance standards appears,it is necessary to supervise the reduction of its shareholders.In theory,through combing the connotation of goodwill and other theories in this article,and further deepening the theoretical research on goodwill accounting,it is helpful to understand the general appearance of goodwill,and can find the difficult points in the theory.This article discusses the difficulties in accounting treatment of goodwill based on the existing problems of goodwill impairment,combined with related basic contents such as business combination and goodwill impairment,and makes suggestions.I hope that it can provide certain information when formulating policy measures in the future. |
