Research On The Impact Of Goodwill Follow-up Measurement Method Change On Mergers And Acquisitions

With the rapid development of China's capital market,mergers and acquisitions occur frequently.In 2018,6998 mergers and acquisitions were aniounced in China's mergers and acquisitions market,with a total transaction value of 576.843 billion US dollars.Goodwill generated by mergers and acquisitions of enterprises,as an asset of enterprises,has the characteristics of being unable to transfer and easy to impair.Since 2017,the A-share market has been in a downturn.Many companies have once calculated a large amount of goodwill impairment,which has a great impact on net profit,resulting in a substantial decline in performance and harming the interests of investors.On January 4,2018,the National Accounting Standards Amendment Committee discussed the follow-up measurement of goodwill.Whether to adopt the comprehensive amortization method or the impairment test method was once again put on the agenda.In the history of accounting development in our country,two methods,comprehensive amortization method and impairment test method,have been used successively for the follow-up measurement of goodwill.At present,there are a lot of goodwill in A-share market,and the calculation of impairment is not standardized enough.In view of this situation,the Accounting Standards Revision Committee has put forward the suggestion to change back to the comprehensive amortization method for follow-up measurement.But for the current situation of China's market,how will the change of goodwill follow-up measurement policy have an impact?Is the change of goodwill follow-up measurement policy conducive to the healthy development of the M&A market?Can the change of goodwill follow-up measurement solve the current problems?What new problems will emerge?It becomes the key to the choice of accounting measurement policy.Based on the case of A company's goodwill measurement,this paper analyses the impact of the change of goodwill measurement methods on reflecting the economic essence,merging companies,investors,industries and capital markets,and explores whether the subsequent change of goodwill measurement methods is conducive to the healthy development of M&A market.Firstly,this paper summarizes the relevant literatures on the definition,measurement methods and accounting economic consequences of goodwill;secondly,it combs the evolution of goodwill accounting policies in various countries,explores the reform objectives in light of the background and historical environment;secondly,it chooses the case of A company's acquisition of B company with a premium on gambling agreement as the research object,and studies the current situation under the case company impairment test method by changing the goodwill.Continuous measurement methods are compared to explore the economic consequences in reflecting the economic essence,merger companies,investors,industries,capital markets and so on.The impact of the changes in the follow-up measurement methods of goodwill is as follows:First,the amortization method can not reflect the real economic essence,and for the existing market behavior of speculating packaging through high premium mergers and acquisitions of hot subject non-performing assets,No.Second,fixed amortization of goodwill will reduce net profit,which will lead to the decline of stock price,deterioration of financial indicators and deterioration of price-earnings ratio,which will lead to the difficulty of refinancing of listed companies,lack of funds and restrain mergers and acquisitions.Third,the reduction of net profit may make listed companies face the risk of delisting,delisting or being subjected to delisting.Marking ST causes market instability;Fourthly,the pressure of fixed amortization makes many M&A targets lose profits,and the mergers and acquisitions either abandon the M&A,or depress the price,or demand to increase performance commitments,restrain M&A and increase the difficulty of achieving performance commitments;Fifthly,the years of impairment of goodwill in different industries are different,and the adoption of unified amortization years has a greater impact on some industries,which is not conducive to the realization of performance commitments.Industry integration;through suumarizing the above economic consequences,it is concluded that changing goodwill measurement methods can not solve the existing problems,and is not conducive to the healthy development of China,s M&A market.Finally,the author suggests that in order to maintain the healthy development of China's M&A market,we should improve the reliability of M&A transactions and strengthen supervision.Making the M&A market more suitable for China's current economic development needs is conducive to enterprise integration,protecting the interests of investors and maintaining market stability.