A Study On The Problems And Causes Of Goodwill Impairment

In recent years,due to the influence of national policies,mergers and acquisitions in the capital market have been active.Many listed companies have launched M&A activities of different scales.The high premium and high performance commitments have become the norm for mergers and acquisitions,and are often accompanied by the confirmation of large-value goodwill.With the accumulation of goodwill on the books of listed companies,the issue of impairment of goodwill has become more and more serious.The large amount of goodwill impairment directly consumes the net profit of listed companies,causing huge losses and affecting the current performance.Companies with large amounts of goodwill impairments often identify high goodwill at the beginning of the merger,which also exposes a series of problems with the impairment of goodwill.The greater the degree to which the initial assets of the merger are overvalued,the higher the goodwill formed,the greater the risk of impairment,and the more uncertain the future performance.In addition,since the subsequent measurement of the current combined goodwill adopts the impairment test method,which involves many subjective estimates,the operational space is large,and many enterprises conduct earnings management in the process of goodwill impairment,which makes it difficult for external information users to obtain.Real and reliable financial information,there are many problems with the impairment of goodwill of listed companies.Based on the above background,this paper adopts the case study method,aiming at analyzing the problems existing in the process of goodwill impairment of listed company Steyr Power Co.,Ltd.,and exploring the causes of these problems,and then draws conclusions.And make corresponding suggestions.This paper first reviews the research literature related to goodwill,expounds the concepts and theories related to goodwill,and provides theoretical basis for subsequent research.Then,the current listed company's mergers and acquisitions reputation and its depreciation scale statistics,found that listed companies(non-financial)mergers and acquisitions in recent years,goodwill,and the depreciation of goodwill is becoming more serious,which is not conducive to the stable development of the capital market.Next,we introduce the case of Steyr's merger and acquisition,sort out the impairment of goodwill after the merger,and analyze the problems in the process of impairment of goodwill,from the initial confirmation of goodwill and the subsequent impairment.After analysis,this paper believes that the impairment of goodwill of listed companies mainly has the following problems: the valuation of assets at the time of merger and acquisition is too high,which affects the initial recognition of goodwill;the subsequent measurement of goodwill is unreasonable,and there is a delay in accrual The phenomenon of impairment of goodwill;the disclosure of goodwill impairment test information is not perfect,which is not conducive to investors to obtain real and reliable financial information.Further analysis of the reasons for the impairment of goodwill,this paper believes that highprice mergers and acquisitions are the root cause of the impairment of goodwill.In this case,the two parties have the purpose of self-interest,so that the goodwill is recognized at the beginning of the merger,and the subsequent goodwill is impaired.Lay hidden.Secondly,in the follow-up measurement of goodwill,the major shareholder has the purpose of taking out the equity income,delaying the depreciation of goodwill and releasing the risk of goodwill impairment at one time,causing huge losses in listed companies,seriously affecting the current performance and harming small and medium-sized enterprises.In view of the above analysis,this paper believes that it is necessary to strengthen the supervision of mergers and acquisitions activities,issue a letter of inquiry on performance commitments that are obviously inconsistent with the facts,and strengthen the restraint and condemnation of third-party evaluation agencies.Second,improve the operability of the goodwill impairment test method.In the information disclosure of goodwill,it is recommended to further refine the requirements for information disclosure.Some voluntary disclosures can be changed to mandatory disclosure to strengthen the punishment for non-disclosure behavior.