Research On The Impairment Of Goodwill Under The High-premium Mergers And Acquisitions Of Great Wall Film

Since my country introduced relevant regulations in 2014 to encourage mergers and acquisitions,my country has set off a wave of mergers and acquisitions.In recent years,the number and amount of mergers and acquisitions in our country have maintained a growing trend,but after the enthusiasm has cooled down,there have been numerous problems of impairment of goodwill.Beginning in 2018,the number of cases of impairment of goodwill has shown a spurt.The definition of high goodwill is the company’s strong future profitability,which may be a good thing for the company,but in actual operation it is a high risk.Once the merged company’s future profitability does not meet the standard,the accounting will impair the goodwill.Impairment of goodwill will offset the performance of the acquirer and bring business crisis to the enterprise.At present,the industry with the most serious impairment of goodwill is the media industry.Due to its own asset-light attributes,the media industry will be seriously overvalued during mergers and acquisitions,and the expected profitability of the media industry is difficult to predict.A high-value performance commitment,and ultimately under the combined effect of high valuation and high performance commitment,the media industry has repeatedly appeared high-premium mergers and acquisitions.The current accounting standards stipulate that the difference between the merger cost and the fair value of the identifiable net assets of the purchaser during mergers and acquisitions is goodwill.This means that high-premium mergers and acquisitions will generate large amounts of goodwill.The higher the goodwill,the greater the risk of impairment of goodwill and the greater the impact on the enterprise.Based on this background,this article selects Great Wall Film as the research object.As a member of the media industry,Great Wall Film began its own merger and acquisition after its successful backdoor listing in 2014.In the four years from 2014 to2017,Great Wall Film’s mergers and acquisitions exceeded 15 companies have formed a goodwill of more than 1.3 billion.But in 2018,Great Wall Films suddenly accrued an impairment of 377 million in goodwill,and in 2019 it accrued an impairment of 880 million in goodwill.This article takes Great Wall Film as the research object,sorts out the problems of goodwill in high-premium mergers and acquisitions,and puts forward corresponding opinions and suggestions on the problems.The main research questions of this paper include: whether there is an overestimation phenomenon in the initial measurement of goodwill,whether there are defects in the subsequent measurement of goodwill,and whether there are other reasons for the impairment of goodwill.This article summarizes the conclusions of scholars from all walks of life by reading relevant literature,combining the synergy theory,information asymmetry theory,principal-agent theory and the conceit hypothesis theory.By studying a series of goodwill impairment cases of Great Wall Film,the following conclusions are reached:M&A The company’s valuation is overestimated,the amount of performance commitments is too high,the asset-light characteristics of the media industry,the subsequent goodwill impairment calculation methods are insufficient,the resignation of core personnel has a significant impact on the company,the payment method for mergers and acquisitions is single,there are related mergers and acquisitions and profit manipulation may.Through the above series of analysis and summary,this article puts forward relevant suggestions: In the initial measurement,when choosing the evaluation method,the most suitable evaluation method should be selected in accordance with the actual situation of the enterprise.Maintain a high degree of prudence in the signing of performance commitments to ensure that the amount of performance commitments is reasonable;in subsequent measurement,the market should continuously improve the goodwill impairment calculation method,and the enterprise should establish a good talent training system to reduce the loss of goodwill.Value risk;in terms of payment methods,companies should choose the most appropriate payment method for mergers and acquisitions in light of all aspects;market supervision should be strengthened,and information disclosure should be mandatory to protect the interests of investors.