Study On The Goodwill Of Xinbang Pharmaceutical Co Ltd.Acquired ZT Company

In recent years,under the guidance of economic restructuring and policies,Chinese M&A market continues to heat up.The willingness of listed companies to conduct M&A continues to increase.This phenomenon has resulted in the continuous growth of the scale of goodwill of A-share listed companies in China.In essence,goodwill should mean that enterprises have a strong ability to obtain excess earnings in the future.However,some listed companies withdraw a large amount of goodwill impairment,resulting in a huge fluctuation of performance,causing a great negative impact on the benefit of companies and shareholders,and disturbing the order of the securities market.At present,the high attention should be paid to the existence of huge goodwill in the stock market.Based on the above situation and the previous research results and related theories,this paper took Xinbang pharmaceutical Co Ltd.as the study object,introduced its recognition of goodwill and the follow-up measurement of goodwill impairment in the merger and acquisition case of ZT company.Then,this paper concluded that there are some problems in the M&A of Xinbang pharmaceutical,such as the high premium rate of M&A,the blind M&A of the management layer,the senior executive and major shareholders get huge profits from the reduction of the shares,the subsequent measurement process of goodwill is not transparent,the provision of goodwill impairment is not timely,and the internal control and supervision are not in place.Based on the analysis of the above problems,six reasons were summed up,including the subjectivity of the use of value evaluation methods,the urgent desire to fill in the market gap,the existence of benefit transportation motivation of related transactions,the arbitrariness of impairment test,the existence of earnings management motivation,and the lack of internal control mechanism.This paper also put forward relevant countermeasures and suggestions,enterprises should guard against the risk of high goodwill and avoid one-time withdrawal of large goodwill impairment.Enterprises should carefully deal with the results of value evaluation,make M&A decisions scientifically,optimize the ownership structure to prevent the abuse of related transactions,pay attention to the performance of merged companies in time,and establish an internal control system for M&A activities.This paper also suggests that in the future,the parallel method of impairment test and amortization can be considered to measure goodwill.The continuous expansion of the scale of goodwill has brought great goodwill risk,reflecting some problems in the process of goodwill recognition and measurement.The research in this paper is of positive significance to help enterprises to prevent and resolve the goodwill risk and improve accounting standards.