Research On The Causes And Economic Consequences Of Goodwill Impairment In Shuanglin Stock Merger And Acquisition

M&A is one of the major forms of capital operation and management.Under the influence of the national policy incentives and the continuous expansion of the enterprises,the M&A of the domestic listed companies is still hot.In order to obtain high-quality assets and realize their own development strategies,many enterprises have carried out mergers and acquisitions with high premiums for many times.With the occurrence of a large number of high-premium mergers and acquisitions,the company’s goodwill impairment risk is increasing,and the withdrawal of a huge amount of goodwill impairment directly leads to a change in performance,which brings a variety of negative impacts to the enterprise and its investors.Therefore,it is very important to analyze and study the causes and economic effects of goodwill impairment in M&A transactions.This paper takes the goodwill impairment events of Shuanglin From 2014 to 2018 after its acquisition of several enterprises as the research object,and analyzes the causes and economic consequences of its acquisition goodwill impairment.First of all,according to the basic conception,theory foundation and related documents,the author makes an analysis of the reason,course,forming and deterioration of Shuanglin Stock.Secondly,it analyzes the specific causes of goodwill impairment of Shuanglin stock acquisition.Mainly include mergers and acquisitions overestimate the underlying value of the company before,the actual performance of the M&A party not exceeding the expectation",mergers and acquisitions,stepmother unit failed to realize the coordinated development,impairment test method has disadvantages,and utilization of goodwill to achieve earnings management motivation,imbalance in the system of internal control and risk management to external factors considered inadequate and corporate strategy needs to change.Thirdly,this paper analyses the economic consequences of the impairment of goodwill related to the merger and acquisition of Shuanglin on the company’s financial performance,stock market performance,enterprise value,the impact on shareholders and the impact on the company’s talent.The results show that: Shuanglin Goodwill Loss has a negative effect on the Company’s profitability and solvency,and the Company’s stock price is still low;And the value of the company has been damaged;small shareholders’ benefit is hurt,the company’s brain drain is severe.Finally,the paper summarizes the research conclusions of the whole paper,and some suggestions are made to avoid the loss of goodwill in M&A,to avoid blind M&A,to obtain control by stages,to make a reasonable determination of merger price,and to deal with synergy and performance obligations reasonably.As for the regulator,it is necessary to improve the accounting standards,reduce the high goodwill impairment,and supervise the high goodwill mergers and acquisitions.For investors,they should pay close attention to the signs of goodwill impairment of listed companies and improve their professional quality.This paper takes the goodwill impairment events after Shuanglin’s merger and acquisition of multiple enterprises from 2014 to 2018 as the research object,and analyses the economic causes and effects of the deterioration of its goodwill due to mergers and acquisitions.Firstly,from a review of basic concepts,theoretical foundations and relevant literature,this article links and analyses Shuanglin’s M&A process,the formation and impairment of goodwill due to M&A.Secondly,it analyses the concrete reasons for the loss of goodwill in the M&A of Shuanglin shares,mainly including overestimating the value of the target company before the merger and acquisition,the actual performance of the acquired party does not meet the expectations,using goodwill impairment to achieve earnings management motivation,the disadvantages of impairment test method and the insufficient consideration of external factors by the management.Thirdly,this paper analyzes the economic consequences of the goodwill impairment of Shuanglin’s M&A from the aspects of the impact of the goodwill impairment of Shuanglin’s M&A on the company’s financial performance,stock market performance,company value and the reduction of major shareholders.The impairment of goodwill from the merger and acquisition of Shuanglin is found to have a negative impact on the profitability and solvency of the company,And make the company’s share price continue to swim in the position;And damage the value of the company.In the end,the conclusion of this paper is summarized.and puts forward specific suggestions to prevent the impairment of M&A goodwill according to the research results: for listed companies,we should avoid blind M&A,obtain control through sub M&A,reasonably confirm the M&A price,and treat the synergy effect and performance commitment rationally;For regulators,we should improve the accounting standards,reduce the impairment of high goodwill,and supervise the mergers and acquisitions of enterprises with high goodwill;For investors,they should pay close attention to the signs of goodwill impairment of listed companies and improve their professional quality.In this paper,the analysis of the research can not only help country Shuanglin shares to realize enterprise may be faced after m&a goodwill impairment risk and its consequences,help follow-up measurement of the goodwill for mergers and acquisitions of other enterprises attach importance to mergers and acquisitions valuation and the formation of goodwill,strengthen the goodwill impairment risk identification,prevention and control also has a certain reference significance.