Research On The Causes And Economic Consequences Of The Goodwill Impairment Of CSG

With the development of the times,many listed companies urgently need to expand their company scale to improve their competitiveness,and epitaxial M＆A is one of the best solutions.With the government’s strong support for mergers and acquisitions,the number of mergers and acquisitions and the frequency of mergers and acquisitions of listed companies have increased significantly,and goodwill,a product of mergers and acquisitions,is also rapidly accumulating in the capital market.In many listed companies,goodwill accounts for the proportion of total assets.It is quite high,and the risk of goodwill impairment is also hanging over the head like a sharp sword.As performance commitments are not up to standard after mergers and acquisitions or business performance changes after the performance commitments expire,goodwill impairment has become the focus of the CSRC.At the beginning of 2020,A-share listed companies have successively announced their performance forecasts.The collective “thunder” of goodwill has severely impacted the capital market,and the interests of investors of companies with “thunder” of goodwill have been damaged.There are many negative effects.CSG Intelligence is a member of the collective "storm thunder" incident of goodwill.The net profit loss of CSG Intelligence in 2019 exceeded 2.6 billion yuan,and the impairment of goodwill was 1.609 billion yuan in that year,which led to the A shares of CSG Intelligence in 2019.The immediate cause of top market losses.Therefore,this paper selects CSG Intelligence as a research case,and based on the review of relevant literature on goodwill impairment,it studies the causes and economic consequences of the huge amount of goodwill impairment provided by CSG Intelligence.First,it introduces the M＆A process,M＆A motivation and goodwill impairment of CSG.Then,from the perspectives of M＆A premium,synergy effect,and earnings management,it analyzes the reasons for the impairment of the goodwill of CSG Smart.Finally,using the event study method,the economic consequences of the goodwill impairment of CSG Intelligence are studied.This paper draws the following three conclusions:（1）CSG Intelligent realizes the comprehensive transformation of industrial intelligence,seeks new profit growth points and pursues synergies through the implementation of extensional mergers and acquisitions.（2）The high initial recognition amount of goodwill,poor post-merger synergy,and the management of earnings management led to the provision of huge goodwill impairment by CSG.（3）The provision of huge amount of goodwill impairment leads to short-term stock price decline and poor financial performance.The following suggestions are put forward in this regard:（1）Listed companies should carefully confirm the transaction consideration and reasonably confirm the goodwill.（2）Listed companies should correctly view performance commitments and reasonably extend the impairment compensation period.（3）Strengthen the integration of resources of both parties in mergers and acquisitions,and give full play to the synergy effect.（4）Improve the goodwill impairment test process and reduce the space for earnings management.