Research On The Causes And Economic Consequences Of Goodwill Impairment Of Wanda Film Holding Co.,Ltd.

In recent years,in order to achieve economies of scale,enterprises have carried out a series of mergers and acquisitions,which have not only carried out high premium mergers and acquisitions,but also brought a lot of goodwill.Goodwill is an important part of the company’s total assets.In the subsequent measurement of goodwill,if there is a large amount of impairment of goodwill,it will have a great impact on the company,such as the company’s profit loss,stock price fluctuation,injury to the legitimate rights and interests of investors,etc.Goodwill impairment is not only concerned by the capital market,but also highly valued by the CSRC.At present,the research on goodwill impairment mostly stays at the theoretical level,and the specific analysis of its deep problems is not deep enough.In this context,this paper adopts the method of combining literature and case analysis,focusing on the analysis of the reasons for the impairment of goodwill and its economic impact.It aims to dig out some useful information,so as to provide some case basis for identifying the motivation of goodwill impairment and analyzing its consequences.At the same time,it can also standardize the goodwill impairment behavior of Listed Companies in China and play a certain reference role in the improvement of accounting policies.This paper selects Wanda Film Holding Co.,Ltd.,a typical company in the tide of goodwill impairment in 2019,as the research subject.Firstly,it combs the relevant literature and theoretical basis of goodwill impairment,so as to provide a theoretical basis for the later analysis.Secondly,it sorts out the formation process of Wanda Film Holding Co.,Ltd.goodwill and the subsequent impairment of goodwill.Thirdly,it deeply analyzes the causes of goodwill impairment from the macro and micro perspectives.The study found that accounting standards flexibility provides an opportunity for goodwill impairment,and the slow pace of industry development and the pressure of goodwill impairment caused by the outbreak of COVID-19;Premium M &A has accumulated high goodwill,failed to fulfill the performance commitments of the target enterprise,poor business integration between the two sides of M &A,and earnings management behavior of enterprise managers,which has become a hidden danger of goodwill impairment in the future.Finally,based on the correlation between goodwill impairment and economic consequences determined by empirical research method,this paper deeply analyzes the economic consequences of massive impairment of goodwill on Wanda Film Holding Co.,Ltd.from the aspects of short-term market response,long-term financial performance and non-financial performance.The research shows that the impairment of goodwill will reduce the ability of the company to create value;Investors will react quickly to goodwill impairment events,resulting in the decline of the company’s share price;The impairment of goodwill will lead to the decline of the company’s profitability,solvency and development ability;The impairment of goodwill will also cause the brain drain and image damage of enterprises.In view of the above analysis,this paper puts forward some suggestions to deal with the risk of goodwill impairment from different angles.From the perspective of accounting policy and supervision,optimize the follow-up measurement method of goodwill and improve the accounting policy and system;Improve the key information disclosure mechanism and reduce the operability of goodwill impairment;Strengthen supervision and standardize the impairment of enterprise goodwill.From the perspective of acquiring companies,choose reasonable valuation methods to avoid the risk of goodwill impairment;Integrate the advantageous resources of both sides and alleviate the pressure of industry impairment.From the perspective of investors,understand investment enterprises and improve risk prevention awareness;Improve judgment and pay attention to rational investment.