A Case Study On The Goodwill Of HuayiBros. Merger And Acquisition And Its Impairment

In recent years,due to the more and more frequent M & A transactions,there are more and more problems in M & A activities,and there are likely to be some inestimable risks,such as performance commitment risk,goodwill impairment risk.At the same time,the problem that enterprises recognize the huge M & a goodwill due to the behavior of high overvalued value and high premium in the process of M & A has also aroused widespread concern and attention.Although the recognition of large M & a goodwill can produce synergy effect with the acquired company to a certain extent,most of the high premium M & A will sign a gambling agreement with performance commitment as guarantee,and the acquired company sometimes fails to achieve the expected performance level,resulting in the M & A enterprises have to withdraw the impairment of M & a goodwill.Once a large amount of impairment is accrued for M & a goodwill,it may lead to a precipitous drop in profits.Based on the above background,based on previous studies,this article first elaborates and sorts out the nature,formation and impairment of related goodwill and the theoretical basis of goodwill for mergers and acquisitions.Afterwards,this article selects the controversial and representative four companies of the listed company Huayi Brothers’ high premium mergers and acquisitions: Zhejiang Changsheng,Yinhan Technology,Dongyang Haohan,and Dongyang Meila as case studies.Through the formation and reduction of huge merger and acquisition goodwill Value analysis.Regarding the reasons for the formation of huge mergers and acquisitions goodwill in this case,after analyzing this article,we believe that the continuous high premium mergers and acquisitions for many years are the source of the formation of corporate huge mergers and acquisitions goodwill;in the subsequent measurement of goodwill,we focus on the impairment of huge mergers and acquisitions goodwill By studying the completion of the performance of the acquired company’s performance commitments to see if there are signs of impairment,the focus is on the polarization of Huayi Brothers in the provision of goodwill impairment: the eight years from 2010 to 2017 Goodwill has made any provision for impairment,but in 2018 a huge amount of goodwill provision was made.In order to make the argument more sufficient,the characteristics of the film and television industry will also be combined in the analysis process,and compared with similar enterprises,hoping to come up with more practical and feasible suggestions.In view of the above analysis and discussion,this article proposes relevant countermeasures to improve the goodwill of mergers and acquisitions from the perspective of Huayi Brothers and regulators.From its own perspective,it is necessary to carefully choose the target of the merger and acquisition and reasonable valuation,to sign a reasonable bet agreement with the acquiree,and also to improve the quality of goodwill disclosure of the merger and acquisition;from the perspective of the regulator,it is necessary to strengthen film and television The supervision of M & A and reorganization in the media industry has continuously strengthened the risk prompts for the recognition of goodwill in large-scale mergers and acquisitions,explored a combination of amortization method and impairment test method,and paid attention to the guidance and supervision of goodwill impairment standards.All in all,this article hopes to analyze the typical case of the formation and impairment of the goodwill of Huayi Brothers ’huge mergers and acquisitions,focusing on the reasons and reasonableness of the substantial impairment of the goodwill of listed companies’ mergers and acquisitions,and the existence of goodwill impairment testing process.The problem is to provide small companies with big ideas and provide suggestions for listed companies and regulators that are conducive to improving the impairment of goodwill in mergers and acquisitions.Such discussion and analysis will promote the healthy and orderly development and reform of China’s capital market.