Research On Goodwill Impairment Of Medical Enterprise Merger And Acquisition

With the rapid development of China’s economy,,under the background of "three go,one fall and one supplement",and under the great pressure brought by economic globalization,enterprises have to think about how to face the risks brought by the rapid changes of market environment and integrate resources.Merger and acquisition has become the only choice for most enterprises.Resource integration through mergers and acquisitions can promote the development of enterprises more quickly and effectively,This makes mergers and acquisitions the norm for medical enterprises.But intangible assets such as patented technology and trademarksand research and development account for a large proportion in the medical industry,so it is difficult to estimate its value in the acquisition process,which results in the acquisition of this industry at a high premium.A large amount of goodwill will be accumulated under the influence of high premium mergers and acquisitions.Once a huge amount of goodwill is impaired,it will bring a huge impact on the profits of enterprises.Therefore,how to identify the risk caused by goodwill impairment and How to effectively avoid this problem which has become a waiting to be solved,Therefore,Based on the merger and acquisition theory,this paper analyzes the current situation of merger and acquisition of Chinese listed companies.In the healthcare industry’s YK example,we analyzed goodwill formation and goodwill impairment processing from the context of three merger and acquisition transactions.The study found that YK Company adopted a large number of betting agreements in mergers and acquisitions,thus forming a huge amount of goodwill in mergers and acquisitions.For subsequent goodwill impairments,the recoverable amount of asset the group was determined by the future cash flow method,and then the impairment of goodwill was calculated and determined.When the futurecash flow method determines the recoverable amount,it involves the estimation of cash flow,discount rate and other parameters in the future years.The estimation of these parameters is highly subjective.Listed companies realize earnings management through goodwill impairment.Based on this,this paper proposes to strengthen the management of betting agreement in the M&A stage to control the high goodwill generated by the high-premium M&A from the source.In the subsequent impairment treatment stage,Improve the measurement method of goodwill,strengthen the disclosure and supervision of goodwill impairment,form the whole goodwill impairment monitoring system,control the enterprise’s surplus management behavior.and the quality of accounting information of enterprises should be improved.The main contribution of this paper is to make an in-depth analysis of the goodwill impairment of medical enterprises by using the "anatomical sparrow" approach,pointing out that the source of the goodwill impairment problem of medical enterprises is the high premium of the bet merger and acquisition,the main reason is the subjectivity of the parameter estimation in the follow-up measurement of goodwill impairment,and propose solutions from these two aspects.It provides guidance and suggestions for restraining medical enterprises from using goodwill impairment for earnings management.