Research On Goodwill Impairment And Economic Consequences Of Listed Companies

During the 14 th Five-Year Plan period,China’s industrial structure upgrading is faced with new opportunities and challenges.Many listed companies join the merger and reorganization tide in order to strive for more market opportunities,avoid all kinds of risks and obtain synergistic effect.When enterprises and the scale of mergers and acquisitions in the capital market expand gradually,goodwill,as a product of mergers and acquisitions,increases continuously in the process,including the formation of high goodwill,which brings high risk of goodwill impairment.Pharmaceutical industry is no exception,"high valuation,high goodwill,high performance commitment" phenomenon is increasingly obvious,in order to attract investors,some listed companies even manipulate financial data,and then whitewash statements.In recent years,there have been frequent "black swan" events of goodwill in the capital market,resulting in company stock price fluctuations and very low performance and profitability,which have had adverse effects on the capital market and investors.According to the above background,the goodwill impairment problem of listed companies is still worth further investigation.Based on the theory of enterprise value evaluation,principal-agent theory and information asymmetry theory,this paper mainly analyzes the goodwill impairment and economic consequences of Yan ’an Bikang through case analysis.Firstly,it introduces the overall situation of Yan ’an Bikang’s merger and acquisition,expounds the goodwill impairment process of Yan ’an Bikang,explores the rationality and timeliness of impairment amount,the appropriateness of recoverable amount of assets and the rationality of asset group division,and the degree of disclosure of the entire goodwill impairment process.Secondly,combined with relevant literature and theoretical basis,the motivation of goodwill impairment is explored from the perspectives of premium merger and acquisition,performance commitment and earnings management of the company.Thirdly,in order to explore the economic consequences of the case company’s goodwill impairment,this paper uses the event analysis method and the financial index analysis method to study the short-term market reaction,financial and non-financial performance reaction,the audit situation of the third party firm and the change of enterprise value brought by goodwill impairment.The research found that,on the one hand,due to the unreasonable merger and acquisition of Yan ’an Bikang,resources were not effectively integrated after the merger.High goodwill was confirmed at the initial stage of the merger,but relevant performance commitments were not fulfilled during the operation period after the merger,which resulted in the increasing accumulated goodwill.The company’s goodwill impairment crisis was exposed by large amounts of goodwill.Therefore,the stock price,financial benefit and enterprise value of enterprises are negatively affected and suffer serious losses.On the other hand,the goodwill problem of the case company has exposed the internal governance of the listed company,the efficiency of capital market management and the intensity of supervision and other aspects of great room for improvement.In order to further optimize the capital market environment,the company should standardize the value evaluation process of the target company and improve the measurement process of goodwill and goodwill impairment recognition at the initial goodwill recognition stage.Regulators should strengthen the supervision and management of enterprises,strengthen the management of the disclosure of relevant information such as the impairment of business goodwill,and constantly optimize the efficiency of resource allocation in the capital market.Evaluation institutions should improve their professional knowledge and skills,and investors should strengthen their professional knowledge to improve their ability to identify themselves and avoid blindly following the trend.The prominent problem in the process of goodwill impairment of Yanan Bikang has sounded alarm for the listed companies in the capital market.Existing studies on goodwill impairment risk have not taken the case enterprise as the research object,which can further enrich the research results of our country’s goodwill field,especially it has reference value for the pharmaceutical manufacturing industry.It can help pharmaceutical enterprises reasonably avoid or reduce the risk of goodwill impairment and promote the healthy and stable development of enterprises...