Research On The Risk Of Goodwill Impairment In M&A In China’s Internet And Related Services Industries

In recent years,under the guidance of the economic environment and policies,China’s M & A market has continued to heat up,and M & A has become a fast way for corporate growth and transformation.The rapid development of the Internet and related service industries and good prospects have led to a boom in mergers and acquisitions in the capital market in the Internet and related service industries.However,the M & A boom has not subsided.Some Internet and related service companies have failed to fulfill their performance commitments during the commitment period.Coupled with the high goodwill formed by the high premiums of the M & A targets,the parent company has to calculate the increase in goodwill.Value loss,causing the parent company’s current performance to suffer significant losses.As an emerging industry,the Internet and related service industries have certain specialities in terms of finance and operation.This article selects Tianshen Entertainment’s M & A goodwill impairment event as a case to conduct a study.It is hoped that this case study will be used to reduce the occurrence of unreasonable goodwill when merging Internet and related service companies,effectively prevent the impairment of goodwill,and reduce The negative impact of goodwill impairment on the company.This article first uses the literature research method to analyze the goodwill impairment risk in corporate mergers and acquisitions from the three aspects of the factors affecting the premium,the reason for the impairment of goodwill,and the risk of goodwill impairment.Then,through the case study method,select typical cases for research.In the case analysis,it is found that there are many reasons for the impairment of the goodwill of the acquirer.For example,the evaluation method of the target company during the merger and acquisition is inappropriate,the target company is unable to continuously achieve high performance commitments,and the insider control enables the company to continue High premium mergers and acquisitions.After clarifying the reasons,the entire case is summarized,and preventive measures are proposed for the risk of impairment of goodwill in mergers and acquisitions.First of all,for an M & A enterprise,before the M & A,the acquirer should formulate the M & A target according to the company’s actual business strategy.At the same time,the company should maintain a good internal governance mechanism to make the M& A behavior really beneficial to the company’s long-term development.During the M & A process,,Adopt appropriate value evaluation methods to evaluate the target of the merger and acquisition,adopt step-by-step merger and acquisition transaction design,consideration instalment payment,goodwill impairment commitment compensation and other provisions;after the merger,pay attention to the technical,management,human and other aspects of the merger and acquisition parties Integrate the work so that mergers and acquisitions truly achieve the expected synergies and prevent the risk of goodwill impairment.Secondly,it proposes to improve the system of goodwill accounting,such as confirmation of goodwill related asset groups,subsequent measurement of goodwill,and disclosure of goodwill information.Finally,it is suggested that external regulators should pay more attention to goodwill assets and do their best to monitor them beforehand to prevent the risk of goodwill impairment.