Research On Formation And Follow-up Measurement Of Songcheng Performance's Purchased Goodwill

The recognition of goodwill in accounting circles has been carried out from two perspectives.First,value theory of excess returns: goodwill is an economic resource that can bring excess profits to enterprises.Second,master valuation account: goodwill is the sum of the enterprise as a whole greater than its components.Due to the interaction and mutual correlation of the enterprise as a whole,the value of the total assets will be higher than the sum of individual assets,resulting in a synergistic effect.The former is a qualitative description of goodwill,which provides a theoretical basis for the recording of goodwill as assets.The latter is a quantitative description of goodwill,from the perspective of methodology to explain the measurement of goodwill.The essence of goodwill is the ability of an enterprise to obtain excess profits,the formation of which depends on a variety of factors,such as high brand,advanced technology,advanced management level,stable customer resources,superior geographical location and so on.This ability to make the enterprise in the competitive advantage,called self-generated goodwill.In its conceptual framework,the iasb defines "assets" as: resources controlled by the firm as a result of past events that are expected to result in future economic benefits flowing into the firm.Internally generated goodwill is the economic resources that bring excess economic benefits to the enterprise,which is in line with the definition of assets.However,internally generated goodwill is an intangible economic resource with no physical form and adhesion,so it is difficult to determine the measurement standard.Therefore,the existing accounting practice does not measure internally generated goodwill.Merger and acquisition refers to the merger and acquisition among enterprises.The acquirer(the merging party)acquires the control of all or part of the assets of the acquired party(the merged party)by paying a certain consideration,which is an important means for the enterprise to seek development.Generally speaking,merger and acquisition will produce synergistic effect,that is,the output of two enterprises after the implementation of merger and acquisition will be greater than the sum of the output of the two enterprises before the merger and acquisition.The main source of synergies is the company's ability to generate excess profits,also known as outsourcing goodwill.After the merger and acquisition,goodwill meets the accounting measurement standards.China's accounting standards set forth in the initialrecognition of goodwill purchase: the difference between the merger cost and the fair value share of the identifiable net assets acquired by the purchaser in the merger shall be recognized as goodwill.However,it is still a difficult problem in accounting theory and practice field how to measure the purchased goodwill after the enterprise merger and acquisition.The subsequent treatment of purchased goodwill in accounting standards has undergone the transformation from systematic amortization method to single impairment method,whose purpose is to improve the accuracy of financial information and reflect the value of purchased goodwill more reasonably.However,since the implementation of the single test method,many listed companies have taken a huge impairment of goodwill,reducing the usefulness of financial information of listed companies.Throughout history,there have been four main methods of subsequent measurement of purchased goodwill: direct write-off method,direct retention method,systematic amortization method and impairment test method.Neither the direct write-off method nor the direct reservation method can reflect the essence of goodwill.The system amortization method is to carry out the system amortization of purchased goodwill in the effective years into the current profit and loss,while the impairment test method is to carry out the impairment test of purchased goodwill on a regular basis,and the existence of impairment is included in the current profit and loss.The amortization method and the impairment method have their own advantages and disadvantages.Based on the above two methods,this paper puts forward the "impairment plus amortization method advantage theory" for the subsequent measurement of purchased goodwill.This paper mainly studies the influence of different outsourcing goodwill follow-up treatment methods on the economic consequences of enterprises.First of all,this paper makes an in-depth study on the purchased goodwill generated by enterprise mergers and acquisitions in the current environment and its subsequent measurement.It finds that the existing single impairment method cannot meet the usefulness of financial reports,and puts forward that the use of impairment plus amortization method for subsequent measurement can more truly reflect the value of goodwill.Secondly,it introduces the relevant system and theoretical basis of goodwill,describes the specific steps of dealing with the purchased goodwill in the enterprise merger and acquisition,and makes a detailed study on the three different subsequent processing methods of purchased goodwill,namely impairment test method,systematic amortization method and impairment and amortization method.Finally,from the perspective of the case,this paper analyzes the formation and subsequent measurement of the purchased goodwill of the six rooms acquired by song cheng performing arts,and then deals with the purchased goodwill by using impairment test method,systematic amortization method and impairment and amortization method,and analyzes and studies the economic consequences of these three methods.And on this basis,the accounting treatment of outsourcing goodwill put forward Suggestions.Combining theoretical knowledge with practical cases,this paper analyzes and obtains the "advantage theory of impairment and amortization method",that is,using impairment and amortization method for the subsequent measurement of purchased goodwill can most truly reflect its value.Although the impairment method reflects the excess profitability of enterprises and conforms to the essence of goodwill,it will lead enterprises to overestimate the value of goodwill,resulting in the lag of financial information and the risk of earnings management.Although the amortization method can not reflect the future excess profitability of enterprises and will inhibit the merger and acquisition synergies,it can improve the accuracy and usefulness of financial reports.The combination of the two can make the enterprise more reasonably reflect the value of goodwill in the financial report;It makes the management of the enterprise have the foresight of goodwill impairment risk and inhibits the acquisition of goodwill at a high premium to some extent.The innovation of this paper lies in:Firstly,Combined with the substantial theory of goodwill,the subsequent measurement method of purchased goodwill is analyzed,and the "advantage theory of impairment plus amortization method" is put forward.Secondly,Combined with the case of merger and acquisition,from the perspective of practice,three follow-up measurement methods are adopted to deal with the purchased goodwill,to explore the economic consequences of different methods,and to verify the superiority of "impairment plus amortization method".Thirdly,Based on the "advantage theory of impairment and amortization method",I put forward my own opinions on the treatment of goodwill purchase.