Research On The Consolidation Goodwill Measurement Problem Of D Company

In recent years,mergers and acquisitions of listed companies have continued to heat up.M&A goodwill,as a product of M&A premium,has grown rapidly under the catalysis of “high valuation and high performance commitment”.By the end of 2018,domestic listed companies had implemented 3338 M&As with transaction amount reaching 2 trillion yuan,and book value of goodwill reaching about 1.45 trillion yuan.Behind the high premium is a high valuation of the underlying assets,which often requires high performance commitments and performance compensation agreements.If the underlying assets fail to fulfill the performance commitments,not only will they not increase the shareholder's wealth,but there may also be risks such as object losses and goodwill impairments.Therefore,research on the measurement of corporate goodwill is particularly important.This paper selects the Oriental Tower from the construction industry as a research object,hoping to provide some useful suggestions for the measurement of the goodwill of listed companies.Firstly,the paper systematically sorted out the relevant literatures of business combination and the nature and measurement of corporate goodwill.And then it analyzed the motivation of M&A based on synergy effect theory,the initial confirmation of the goodwill of M&A based on the principal-agent theory and stakeholder theory and the impairment of the goodwill of M&A based on the transfer theory.Thirdly,the paper reviewed the event that Dongfang Tower acquired Sichuan Huiyuanda to generate huge goodwill,and expounded its M&A background and the initial confirmed value and the subsequent impairment of M&A goodw ill.We found that the Oriental Tower blindly confirmed the goodwill in the initial recognition with the premium deviating from the essence of goodwill.We also found the lack of reasonableness of goodwill impairment provision and the insufficient disclosu re of accounting information related to goodwill in subsequent measurement.And then the paper proposed an improvement plan for the measurement of M&A goodwill of Dongfang Tower.The initial measurement of reputation should improve the accuracy of the valuation of the underlying assets,and use the method of impairment,amortization and the parallel method of impairment and amortization in subsequent measurement to make a comparison.We also proposed to use the method of combining amortization and impairment testing in the subsequent measurement with the purpose of making the accounting measurement of goodwill return to rationality.Finally,in order to regulate the measurement of M&A goodwill of listed companies,we gave recommendations to listed companies,regulators and standards-setting parties respectively.The possible innovation of the paper lies in the fact that we selected the traditional manufacturing enterprise Oriental Tower and the paper indicated that the measurement of goodwill in mergers and acquisitions is not only prominent in light asset companies,but also representative in traditional industrial enterprises.In view of the existing problems in the current guidelines,this paper explored and analysed whether the subsequent measurement of goodwill could use the method of combining amortization and impairment testing so as to reduce the risk of serious impact on enterprises caused by large impairment of goodwill.