Research On The Mechanism And Economic Consequences Of Huge Goodwill Impairment Of Liard Optoelectronics

With the continuous development of China’s capital market,more and more listed companies can expand their business scope and improve their financial performance through mergers and acquisitions,so as to enhance their market competitiveness and realize the rapid growth of enterprises.However,many cases of enterprise mergers and acquisitions are high premium mergers and acquisitions,and the huge goodwill formed by high premium mergers and acquisitions has a high risk of goodwill impairment.When the business condition of enterprises deteriorates,a huge goodwill impairment will occur.This paper takes Liard Optoelectronics Co.,Ltd.as an example to study the mechanism and economic consequences of huge goodwill impairment.Liyard Optoelectronics Co.,Ltd.is in the LED industry.Since its listing in 2012,it has realized its development strategy through many mergers and acquisitions,and has accumulated huge goodwill in the process of continuous mergers and acquisitions.In the fourth quarter of 2020,the enterprise huge goodwill impairment,although in the face of the Shenzhen stock exchange attention,liard photoelectric co.,LTD.Denthe existence of "big bath" behavior,explained due to the impact of COVID-19 outbreak,in the cautious perspective of reasonable accounting treatment,but this behavior,we still have reason to doubt is "big bath" type surplus management.therefore,This article starts from the source,Combing the continuous merger and acquisition and the formation process of Liard Optoelectronics Co.,Ltd.and huge goodwill,Analyzing the reasons for the company’s high premium acquisition and huge goodwill impairment,Verify that the huge goodwill impairment has traces of surplus management;Then,the event research method is used to analyze the impact of the huge goodwill impairment of Liard Optoelectronics Co.,Ltd.on the market performance,Select the financial indicators from 2012 to 2020 to analyze the impact of continuous mergers and acquisitions and huge goodwill impairment on financial performance,Analysis the impact of the company’s huge goodwill impairment on the non-financial performance;Finally,countermeasures and suggestions for the merger and acquisition activities and management of listed companies.