Discussion On Subsequent Measurement Of Consolidated Goodwill

Merger and acquisition is one of the main ways for enterprises to develop rapidly,China also witnessed a boom in merger and acquisition from 2014 to 2016.The culture and media industry,which has been encouraged by the government and has experienced a rapid development,also stepped on the road of merger and acquisition.At the end of 2018,China securities regulatory commission issued a document which aimed to warn of the risk of goodwill impairment.In such context,this paper explores the reasons for the formation of huge consolidated goodwill in the mergers and acquisition of the culture and media industry,and further discuss the rationality of the subsequent measurement of consolidated goodwill.Finding out a more reasonable and more practical measurement for goodwill is of great significance.By the case of The GREATWALL Film &TV co.,ltd,this paper will compare the reflection of financial data on operating conditions under different subsequent measurement of consolidated goodwill,and through the analysis of the case,suggestions on the subsequent measurement will be proposed.Goodwill has always been an unfailing topic in academic discussion due to its peculiarity.Firstly,this paper introduces the relevant theories of goodwill,including The Ternary Theory of Goodwill,Merger Theory and its accounting measurement,and also the evolution of accounting standards in different countries.Then it briefly introduces the case of The GREATWALL Film &TV co.,ltd,reviews the forming process of its huge goodwill,and analyzes the motivation of earnings management.Then this paper analyzes the economic consequence under impairment test method.After this,four subsequent measurements and their economic consequences are introduced and compared.Financial indicators under Systematic Amortization Method and under Impairment Test Method of this company are analyzed and compared.Based on all the analysis,a point that Systematic Amortization Method is more practical.At last,a few advices on improving these two measurements are given.Most researches on consolidated goodwill in China are at the theoretical level.The subsequent measurement method of consolidated goodwill is only based on the theoretical essence of goodwill,and does not consider whether the impairment test method can objectively and truly reflect the operating status of the enterprise in practice.The innovation of this paper lies in the analysis and comparison of real case data and this paper attempts to provide suggestions for the choices of subsequent measurement of goodwill that are more in line with the actual situation...