Research On The Reasons And Countermeasures Of The Huge Goodwill Devaluation In The Media Industry

In recent years,more and more companies have joined the M & A army due to their own operating conditions and development needs,and the media industry is particularly prominent.In the past few decades,the number of companies in the media industry has increased year by year.Many companies have expanded their business scope through continuous mergers and acquisitions to achieve coverage of the upstream and downstream of the industry chain.However,the media industry as a representative of asset-light companies often has high premiums during mergers and acquisitions,leading to the expansion of goodwill.China introduced a new accounting standard in 2006 and adopted the impairment method for subsequent measurement of goodwill in order to measure the value of goodwill more fairly.However,the risk of huge goodwill has also become a key factor affecting the company's subsequent operations,which has caused the capital market to worry about a huge goodwill bubble.Therefore,this paper uses the case study method to take Tianshen Entertainment as an example to analyze the reasons for the huge impairment of goodwill in the media industry and propose corresponding countermeasures.Based on the review of relevant research status at home and abroad,the paper elaborates on the relevant theories of goodwill impairment,and briefly summarizes the current situation of the goodwill and goodwill impairment of listed companies in the media industry.For the consideration of typicality and representativeness,Tianshen Entertainment was selected as the case company.Through detailed analysis of the case,it found out the reasons behind its huge goodwill impairment,including:(1)The initial measurement amount caused by high premium mergers and acquisitions is artificially high;(2)It is difficult to achieve gambling due to the changes of industry or policy;(3)Weakened restrictions on the acquiree after gambling is completed;(4)A large number of subjective judgments provide management with room for management,and management will perform earnings management because of smooth profits or cover losses,etc.Finally,the paper mainly proposes the method of combining the amortization method and the impairment test method for the subsequent measurement of goodwill from the perspective of accounting standards.At the same time,it also gives corresponding countermeasures to avoid impairment risks from the perspective of enterprises and regulatory department.The innovations of this paper are as follows:Firstly,it takes the accounting standards as the standard,and selects Tianshen Entertainment's huge amount of goodwill reduction as a specific case;The second is a multi-angle analysis of the large amount of goodwill reductions in media company mergers and acquisitions,which is based on the characteristics of China's media industry,and propose specific countermeasures.