Research On Motivation And Economic Consequences Of Dalian Zeus Entertainment Co.,Ltd

With the support of national policy in 2014,there was a heated M&A boom in the market.However,the word goodwill began to appear more and more frequently in2017,becoming a synonym for “black swan” of some listed companies.People have begun to have a heated discussion and Research on goodwill.Reckless high premium M&A,while helping enterprises to expand their scale,has laid a hidden danger for the "performance thunder" in the later stage.Since 2013,the total impairment of goodwill has continued to increase from RMB 1.683 billion to RMB 36.62 billion in 2017,which is obviously unreasonable.High goodwill impairment not only seriously damaged the profit level of the company in that year,but also brought adverse consequences to the future development ability of the company.In the event of impairment in 2018,Tianshen was the most astonishing company.The company accrues about 4.06 billion yuan of goodwill impairment reserves,accounting for62.52% of the original value of goodwill in the last audited year,which caused a serious blow to the development of the company.Through case study,this paper focuses on the analysis of the causes and economic consequences of the huge impairment of goodwill,hoping that the lessons of the failure of the case enterprises can provide valuable reference for other companies,regulators and small and medium-sized investors in China.First of all,this paper combs the domestic and foreign literature,describes the background and significance of the topic,summarizes the previous research experience and research results.Secondly,it introduces the theory related to goodwill,and describes and analyzes the phenomenon of large amount withdrawal and large amount impairment of goodwill in A-share market.Then is the case introduction,elaborated the company's huge goodwill formation process as well as the goodwill devaluation process.On this basis,based on relevant theories,combined with the case data of Tianshen Company,this paper analyzes the reasons for the formation of goodwill and the behavior motivation of enterprises.Through the event study method,this paper analyzes the economic consequences of enterprises in the period before and after the announcement and the huge amount of impairment,studies the market reaction,and makes an in-depth analysis on it.Finally,according to the results of the case analysis,this paper refines the enlightenment brought by the huge impairment of goodwill in this case,and putsforward relevant suggestions.In order to deal with the risk of goodwill impairment,this paper argues that enterprises should maintain a prudent attitude and reasonably confirm the degree of merger premium,avoid blind merger,strengthen due diligence,and reduce the risk of goodwill impairment in the later period.The supervisors can take the way of combining before,during and after the event to promote the reasonable and orderly development of M&A activities,protect the rights and interests of investors,and maintain the healthy development of capital market;the provisions on goodwill in accounting standards should be more detailed to reduce the possibility that listed companies think to manipulate the value reduction of goodwill;for small and medium-sized investors,they should try to avoid speculation when investing Companies with frequent mergers and acquisitions should not only pay attention to the financial indicators of the company at that time,but also pay attention to the impairment risk in the future after the recognition of goodwill,and effectively safeguard their own interests.