Research On The Goodwill Impairment In Jincheng Pharmaceutical’s High Premium Mergers And Acquisitions

With the vigorous development of the securities market,in order to pursue rapid mergers and acquisitions to achieve the purpose of expanding the capital structure and improving performance,there are many high-value premium mergers and acquisitions.The high premium comes from optimistic about future economic inflows after M&A and optimism about the synergistic effects after M&A.With the occurrence of high premium mergers and acquisitions,a huge amount of merger goodwill also followed.However,in 2019,many A-share listed companies have accrued a large amount of goodwill impairment provisions due to various reasons such as underperformance,which has caused serious negative impacts on listed companies and thus affected the overall stock market.This article selects the typical Jincheng Medicine high-premium merger and acquisition case,starting from the specific case,to study the internal reasons for its provision for largescale goodwill impairment.This article first introduces the background of the case,briefly introduces the situation of both parties to the merger and acquisition process,and puts forward some problems in the merger and acquisition process.It is found that there are problems such as high valuation and unreasonable performance commitment during the merger and acquisition process.There has been a high premium in mergers and acquisitions.Next,the case is analyzed in depth,and the formation of goodwill,the causes of impairment of goodwill,and the economic consequences of goodwill impairment are analyzed.Finally,it is concluded that in the process of M&A and restructuring of listed companies in my country,due to the preference for performance commitment and the overconfidence of management,it is easy to cause a high premium in the M&A process,which in turn leads to a high amount of goodwill.Since high-quality goodwill deviates from the value level it represents,it is prone to largescale accrual losses in the future,and the impairment of goodwill is inversely related to the performance of the securities market.This article selects the representative Jincheng Pharmaceutical M&A event as the research object,takes the specific case as the starting point of the study,conducts an in-depth analysis of the high premium M&A behavior of listed companies,explores the sources of huge goodwill of listed companies,and discusses goodwill accounting information The quality provides some new perspectives and research ideas for related research,and puts forward some of its own recommendations to listed companies and regulatory agencies.