Research On Yong’an Forestry Co.,Ltd Merger And Acquisition Of Senyuan Furniture Co.,Ltd Goodwill Impairment

Driven by our country’s economic transition and favorable policies,extensional mergers and acquisitions have gradually become the primary choice for listed companies to create value and increase enterprise appreciation.However,the scarcity of high-quality target resources and the urgent need for transformation of many companies have exacerbated the risks of mergers and acquisitions.Some target companies disguised them as high-quality assets by promising high achievements.At the same time,the main conglomerate purchased them at a high price based on the mentality of desperate appreciation.The capital market gradually accumulated remarkable goodwill.Therefore,studying the issues related to the impairment of listed companies’ goodwill has important practical significance for preventing financial risks.This article introduces a specific case of Yong’an Forestry Co.,Ltd goodwill impairment,analyzes the whole process from the company’s perspective of goodwill confirmation to impairment treatment,and studies the impact of goodwill impairment on the company by analyzing financial indicators and by event research methods.After analysis,it is concluded that there are two reasons for the impairment of Yong’an Forestry Co.,Ltd Goodwill.First,the actual profitability of Senyuan Furniture Co.,Ltd did not meet expectations.Second,in order to successfully complete the performance,Senyuan Furniture Co.,Ltd through the early recognition of revenue,lagging the recognition of costs,the sale of subsidiaries and other means of surplus smoothing.Third,Yong’an Forestry Co.,Ltd executives based on the company’s performance and their own career development and other multiple factors in the performance commitment period for signal management,and after the expiration of the performance commitment to the performance of the "bath",resulting in a large one-time impairment of goodwill in Yong’an Forestry Co.,Ltd in 2018.Provide a remarkable goodwill impairment.Eventually,the impairment of goodwill caused performance "explosion",and Yong’an Forestry Co.,Ltd faced a crisis of delisting.In response to the above analysis results,this article puts forward four countermeasures and suggestions.First,it is not limited to the target company’s confirmation of the asset group related to goodwill,and the confirmation should be based on the purpose of the transaction.At the same time,confirm goodwill based on the purpose of the transaction and select subsequent measurement methods.Second,relying on the company’s original business to deeply integrate the resources of the target company and use net assets to reduce the impact of the impairment of goodwill on the company.Third,strengthen the company’s internal audit work,establish major asset transaction files,and reduce the possibility of misleading statements by directors and supervisors.Fourth,give full play to the regulatory role of the inquiry letter,and regulate and correct the company’s information disclosure behavior through intervening in the event.The research contribution of this article is to focus on specific case,aiming at the phenomenon that Yong’an Forestry Co.,Ltd’s performance commitments are made remarkable goodwill impairment in the first year,from the recognition of goodwill to the treatment of impairment,and its impact is analyzed one by one.Through the combination of existing theory and practice,it provides new ideas for solving the "explosion" of goodwill.