Goodwill Follow-up Measurement Study

In recent years,the number of mergers and acquisitions of listed companies has increased significantly,causing more and more companies to have goodwill in their consolidated statements,sometimes in relatively large amounts.The impact of goodwill in consolidated statements on companies is also increasing.After a listed company's mergers and acquisitions,there may appear to be a good short-term upward trend in the company's performance in the early stage,but many companies will continue to show problems caused by the huge amount of goodwill in the business process.Once a large amount of goodwill is accrued,it will not only affect the performance of the company,but also affect the company's stock price,which will harm the interests of investors.Therefore,almost all companies take the problem of goodwill as a major problem.Nowadays,the methods of impairment of goodwill in most countries mainly include two methods: impairment test method and systematic amortization method,but each method is controversial.Therefore,how to choose a goodwill measurement method for listed companies to reduce The purpose of the negative impact of goodwill impairment on enterprises is a common problem faced by all M & A market participants.In order to provide considerable and reliable financial information,to maintain the stable development of the market economy,and to avoid the frequent occurrence of "Black Swan incidents",this article will study the issue of subsequent measurement of goodwill in mergers and acquisitions based on the background of frequent explosions of goodwill,using a case analysis method.Taking Dongfang Precision Group as an example,the follow-up measurement is performed using three methods: impairment test method,systematic amortization method,and parallel method of impairment and amortization,and the results are analyzed and compared to explore the impact of different methods on financial statements and economic effects.From this,we find a method and a way to solve the deficiency of the goodwill impairment test method,and provide advice for improving the subsequent measurement method of goodwill.Through the comparative study of the three methods,this paper finds that the difference between the three methods is mainly the impact on the profitability of the enterprise.When the company's performance declines sharply: When the impairment test method requires a large amount of goodwill,it will have a huge impact on the profitability of the company;although the system amortization method can keep the company in a relatively stable financial position,The year when the impairment of goodwill is greatly accrued,because each year only amortizes a fixed amount and cannot accurately reflect the company's goodwill status.The parallel method of impairment and amortization can not only make the enterprise's return on net assets less fluctuating,there will be no serious performance decline caused by the explosion of goodwill,and the effect of impairment of goodwill will not be displayed in the statement.Therefore,the parallel method of impairment and amortization can be used to stabilize the profitability of the enterprise and reflect it more realistically in the financial statements.The recommendations in this article based on the case are: use the parallel method of impairment and amortization for subsequent measurement of goodwill;improve the relevant criteria for impairment testing;strengthen internal and external supervision and management;and companies should make reasonable mergers and acquisitions and make careful provisions.