Study On The Impairment Of Goodwill Premium Merger

With the rapid development of our country’s economy,the domestic and foreign mergers and acquisitions enthusiasm rising,goodwill as an enterprise ability to obtain excess returns,increasing in number,and its use has been improved,at the same time,enterprises can also by way of mergers and acquisitions will scale enterprises bigger and stronger.But most mergers and acquisitions are carried out at a high premium.In order to achieve Mergers and acquisitions as soon as possible,mergers and acquisitions will pay for excessive transaction consideration,and in the relatively weak economic environment,the acquired companies will probably not be able to fulfill their commitments.The positive impact of overconfidence premium on mergers and acquisitions has ignored the risk of high reputation impairment caused by the high goodwill brought by the premium merger and acquisition.Based on the research on the theory of goodwill impairment,impairment of goodwill according to the situation analysis,considering the importance of accounting principles and related data availability from two aspects which is a typical case of BlueFocus company as the target case analysis.Then,a comprehensive analysis of the blue cursor case company background,the acquisition of both their own operating conditions,goodwill impairment situation,explore the affecting factors in the impairment of goodwill premium merger condition.Then,combined with BlueFocus own operating status analysis of root causes of BlueFocus impairment of goodwill is: BlueFocus in mergers and acquisitions activity,in the high valuation premium lead to merger,due to the lack of cautious about post merger integration management of not integrate the synergy after the merger,there is no detailed assessment acquired by the subject of the actual profit ability.Did not reach agreement on gambling performance commitments,affecting their performance resulting BlueFocus,impairment of goodwill huge losses.Finally,the influence factors of goodwill impairment occurred under the blue cursor premium merger analysis,and puts forward some countermeasures and suggestions.In accordance with the case study and come into a conclusion,The premium merger and acquisition can improve the short-term operating value ability of the merger and acquisition enterprises,as well as improve the intrinsic value of the company.But the premium merger transaction has potential risk,will have a negative impact on the enterprises future profitability,high premium acquisition appearance will be accompanied by the high reputation,and mergers and acquisitions in the integration process if there is a problem,or the merged enterprise cannot achieve performance commitments,so enterprises because of high reputation the high premium of,gradually transformed into the risk of impairment of goodwill,impairment of goodwill to erode corporate profits way.In this regard,we hope to provide some experience for the merger and acquisition enterprises to expand business and strategic transformation by means of premium mergers and acquisitions as a means.