Research On The Appraisal About Listed Companies' Goodwill Impairment Test In China Based On Monte Carlo Simulation

With active mergers and acquisitions in Chinese A share market,the total amount of listed companies' goodwill shows a growing trend.The huge amount of goodwill leads to the risk of goodwill impairment accumulate continuously.In the meantime,goodwill impairment also took a shock to the performance of some listed companies,even triggered performance storm.And the risk of goodwill impairment has attracted widespread attention of regulatory agencies as well as the market.In order to ensure the objectivity and accuracy of goodwill impairment test,the recoverable amount of asset group or asset group combination related to goodwill needs to be entrusted to an asset appraisal organization.Therefore,whether an asset appraisal organization carries out appraisal business strictly and normatively in accordance with relevant standards and norms is very important,which has an influence on the compliance and validity of goodwill impairment test of listed companies.Besides,an objective,reasonable and accurate appraisal result is conductive to reflecting enterprise's financial information more truthfully,so as to improve the quality of accounting information disclosure.And it is also beneficial to reduce the practice risks of asset appraisal agencies and appraisers themselves.Based on the statistics and analysis of some appraisal reports about goodwill impairment test disclosed by Chinese Shenzhen Stock Exchange in 2018 for the purpose of financial report,this paper summarizes the existing problems in the application of appraisal methods in goodwill impairment test,including the misunderstanding of assumption used in the present value of expected future cash flow as well as the fair value under the income method,the incomplete information disclosure during the selection of appraisal methods and the subjective influence of relevant parameters.In order to solve these problems,this paper introduces Monte Carlo simulation into appraisal about goodwill impairment test,and by analyzing and selecting the factors which affect the uncertainty of the appraisal value,the improved model can enhance the accuracy and rationality of the appraisal results through a large number of simulation experiments.In addition,this paper selects goodwill impairment test case formed by Qinshang company's acquisition of Guangzhou Longwen,which has the characteristics of large fluctuation of goodwill impairment amount and one-time withdrawal of a large number of goodwill impairment,and analyzes its appraisal process and existing problems,such as the unreasonable prediction of relevant parameters,the impact of earnings management motivation.Combined with the improved appraisal model,the recoverable value of the asset group is evaluated,Then,compared with the appraisal results under the traditional method,it is found that the recoverable value of the asset group under Monte Carlo simulation method is more reasonable.Because the fair value of asset group under Monte Carlo simulation method can contain more uncertain factors of an enterprise's performance and development,so appraisal result is more realistic and objective,which provides a reference for the improvement of goodwill impairment test appraisal.In the end,based on the issues discussed,this paper puts forward some suggestions to assets appraisal agencies as well as relevant government departments.