Research On The Impairment Of Goodwill In Business Combination

Due to the continuous promotion of domestic M & A policies by the government since 2014,the culture and media industry has gradually set off a wave of M & A.In accordance with the development trend of the domestic media and film and television industry,major cultural and media companies have already entered the golden period of rapid expansion.The way of development and continuation is mainly driven by the stars unique to the media industry to drive the IP business model.Due to the information asymmetry of the acquiree and the difficulty of valuation of individual intangible assets,the media and film and television industry often obtains expansion capital through "high valuation + performance commitment",which is why media companies frequently acquire high-premium mergers The reason is that there are huge risks and hidden dangers behind the high-premium mergers and acquisitions.It is a powerful catalyst for a bubble economy in the media and film industry.According to the provisions of the current accounting standards,"For mergers and acquisitions made by enterprises not under the same control,the difference between the purchaser's merger cost and the fair value share of the acquiree's identifiable net assets in the merger shall be recognized as goodwill." It also illustrates a phenomenon that once a company has a high-premium merger and acquisition behavior,a huge amount of goodwill will inevitably be generated in the financial statements,and the formation of goodwill accelerates the occurrence of a large amount of goodwill impairment,and a large amount of goodwill impairment Not only will it cause a sharp decline in corporate profits,but it will also have a negative impact on investors,which also underscores the value and significance of this case study of impairment of goodwill.This article attempts to use the company's goodwill and the issue of goodwill as the starting point of the case,and cuts it into six parts to analyze the issue of the company's goodwill impairment.First,the first part is an introduction,which elaborates the background of this case and the research of this article.Meaning;then,the second part is a literature review and theoretical basis of goodwill and mergersand acquisitions,complete and comprehensive analysis of the formation of relevant mergers and acquisitions and goodwill of enterprises,the reason for the impairment of goodwill,the impact of subsequent economic consequences and goodwill The overall prevention of impairment risk prevention measures is put forward,and the theoretical foundation constructed from the perspective of this case is proposed.The third part starts from the media industry and its subordinate film and television industry,and statistics its background,mergers and acquisitions,goodwill,and goodwill impairment status.Sorting out;the fourth part analyzes the case of Huayi Brothers 'acquisition of Dongyang Meila's "star" company.First,it introduces the background of the parties to the merger and acquisition,and explains the process of Huayi Brothers' acquisition of Dongyang Meila and the performance of the acquired party's performance commitments.Situation,summarize the reasons for the impairment of goodwill of Huayi Brothers,and finally use Various financial indicators analyze the economic consequences caused by the impairment of Huayi Brothers' goodwill.The fifth part proposes practical risk prevention measures for the media industry through the analysis of causes and economic consequences.Finally,the sixth part summarizes this article.In order to draw the conclusions of this article and the deficiencies of incomplete thinking.The main research methods used in this article: financial analysis,case study,and literature research,combined with relevant literature and theoretical foundation provided by scholars,analyze and sort out the company's high premium mergers and acquisitions,goodwill impairment,and economic consequences in this case.The Huayi Brothers acquired the "star" company as a case study object,and analyzed the following results:1.The selection of goodwill valuation methods,possible related party transactions,the overall downturn in the media industry,consideration of corporate earnings management factors,and the failure to honor high-performance commitments are the main reasons for this large amount of goodwill impairment;2.The huge economic loss caused by the impairment of goodwill is a seriouseconomic consequence,which is specifically reflected in the impact on the stock price and the impact on the company's performance;3.Due to the "asset-light" nature of the media industry,the target case company lacked awareness of establishing goodwill impairment risk prevention measures,and the awareness of impairment risk prevention was not in place.Therefore,a series of goodwill impairment risk prevention measures have been formulated from the macro regulatory level to the entire media industry level and the micro-enterprise level.Finally,this article summarizes the above issues.