Research On Goodwill Impairment Of Fuchun Technology Merger And Acquisition Of Shanghai Junmeng

The accounting treatment of goodwill has been the focus of debate in the accounting profession for many years.In recent years,due to the relaxation of relevant M & A policies and the need for its own strategic development,China's M & A market has ushered in a wave of M & A booms.High-premium M & A has occurred frequently,and companies with huge amounts of goodwill are everywhere.Especially in the cultural media industry,because of its inherent light asset characteristics,it is easy to generate a large amount of goodwill when it is merged,hiding a great risk of impairment.However,when the M & A boom has not dissipated,there have been “ naked swimmers ”.Some high-premium M & A target companies have seen their profits plummet after the performance commitment period ends,or because of the inability to complete performance commitments during the commitment period,causing huge amounts to the parent company.The loss of impairment of goodwill has a great negative impact on the company and its shareholders and seriously disrupts the rational valuation of the capital market.Therefore,the source of the huge amount of goodwill and the impairment of the large amount of goodwill,as well as the economic consequences caused by it,has become a hot issue of current concern in the stock market.This article selects Fuchun's merger and acquisition of Shanghai Junmeng as a typical case of huge goodwill impairment.Firstly,the background,motivation and process of the merger and acquisition incident are explained.Next,based on the operating conditions of Fuchun shares at that time and the macro environment in which it was analyzed,the three causes of huge goodwill impairment were analyzed,namely the overvaluation of the underlying asset,the delay in impairment testing and the goodwill based on earnings management motivation Impairment.Then,from the two aspects of short-term market reaction and business performance,analyze the negative economic consequences of huge goodwill impairment on listed companies,although the completion of this high-premium merger will bring positive shares to listed companies in the short term However,the high goodwill formed by the high premium is an untimely bomb.After the impairment,the stock price dropped significantly.The loss of goodwill impairment directly engulfed all the netprofits accumulated by Fuchun since its listing.The subsequent development caused serious damage.Finally,analyze the risk prevention measures adopted in the case and their effectiveness.Although Fuchun adopted three goodwill impairment risk prevention measures,it failed to carry out targeted prevention against the causes of goodwill impairment.Huge amount of goodwill has been impaired.Finally,it draws suggestions and enlightenment.For the suggestion on the devaluation of the goodwill of Fuchun's share mergers and acquisitions,it is reasonable to choose the target of the merger and acquisition,to set reasonable performance commitments,and to improve the continuous integration and coordination of mergers and acquisitions.The study found that high goodwill does not necessarily bring high returns.When the false high goodwill brought by high premium mergers and acquisitions cannot support the high performance commitments required,the premium will be converted into risk at this time,in the form of goodwill impairment.Damage the company's current operating performance.Hope to provide a warning for other similar companies,remember to formulate more reasonable M & A restructuring and integration plans during the M & A process,handle M& A valuations carefully,try to avoid or mitigate the negative impact of goodwill impairment,and make small and medium investors The interests are better protected.