A Study On The Impairment Of Goodwill

The essence of goodwill has its own particularity,whose identification and accounting treatment are more complex,therefore it has been disputed since it was incorporated into the accounting research system.With the continuous rising of mergers and acquisitions in China market,enterprises tend to pursue "high valuation,high performance commitments " in the process of mergers and acquisitions.The amount of goodwill generated in recent years is higher.The problems of mergers and acquisitions have gradually obvious.So the impairment of goodwill has become an important reason for the poor performance of some listed companies.In this paper,we take the event of 263 joint stock company's goodwill impairment provision as an example to study the impact and the underlying reasons of the impairment of goodwill,and put forward suggestions accordingly,which is of theoretical and practical significance for the recognition and measurement of goodwill.This article adopts the forms of literature reading and case studies,based on the $354million provision for impairment of goodwill events from 263 company's in 2016.On the basis of the real situation of the case,the paper first analyzes the root cause of the impairment of goodwill.There are four main aspects.The integration of sheet of intangible assets excess earnings decline,the value of internally generated goodwill is not stable,the synergistic effect is not ideal,and the results promised after the expiry are less constraint;Secondly,it explores the263 company's economic consequences of impairment of goodwill,including the impact on solvency and profitability;Finally,suggestions are put forward according to the problems result in impairment.Distinguishing between intangible assets and goodwill,improving the rules of internally generated goodwill,perfecting the continued integration of acquisitions and cooperation,and enhancing the performance after the commitment period are included in these suggestions.