Research On The Risk And Prevention Of Goodwill Impairment In Listed Companies

The accounting standards for enterprises clearly stipulate that in the merger of enterprises,if the acquisition cost exceeds the net asset part of the fair value of the net assets that the acquired party can identify,the excess part is regarded as goodwill.However,in the application of accounting standards,the nature of goodwill is difficult to reasonably indicate that the parties to the merger and acquisition can manipulate goodwill,and the impairment of goodwill has gradually become the main problem of merger and reorganization of listed companies.In the subsequent goodwill measurement process,impairment test is the main method to measure the change of corporate goodwill.However,this method has the problem of insufficient objectivity.In the goodwill impairment test of listed companies,the estimated data are usually affected by human factors,which makes it difficult to obtain accurate measurement,so the amount of impairment cannot be determined,thus increasing the risk of goodwill impairment of listed companies.Therefore,this article will adopt the literature research method,case analysis method,and comparative research method to study the goodwill impairment risk and prevention of listed companies.Taking Dayang Electric as an example,this article will analyze the company’s goodwill impairment risk and reasons,and propose preventive suggestions.Firstly,based on the literature review,this paper summarizes the concepts and related theories of goodwill impairment risk and prevention in listed companies.Secondly,taking Dayang Electric as an example,combined with relevant data,systematically analyzes the causes and adverse consequences of goodwill impairment after mergers and acquisitions.Finally,based on the analysis of the goodwill impairment risk and its causes,the paper proposes corresponding countermeasures and suggestions to prevent the goodwill impairment risk.Through research,it is found that the goodwill impairment risks faced by Dayang Electric in the merger and acquisition mainly include the risks caused by overvaluation due to the overall market environment,the risks caused by using the income method for valuation,the risks caused by the excessive proportion of share-based payment in the payment method,and the risks caused by poor synergy after the merger and acquisition.The reasons are mainly due to the high initial recognition amount of goodwill in the merger and acquisition,the failure of the performance commitment of the merged party to meet expectations The rationality of subsequent measurement of goodwill is questionable,and enterprises have earnings management motivations.Based on the risks and causes of goodwill impairment of Dayang Electric Corporation,this paper proposes preventive measures to address the risks,conducts comparative analysis,and puts forward corresponding suggestions to help enterprises regulate mergers and acquisitions,strengthen integrated management after mergers and acquisitions,and improve their financial management capabilities,thereby achieving the goal of preventing goodwill impairment risks and safeguarding the interests of small and medium-sized shareholders.