Research On Subsequent Measurement Of Acquisition Goodwill Of Guangri Co.,ltd.based On Gambling Agreement

In recent years,incidents of mergers,acquisitions and reorganizations of Chinese companies have appeared continuously,and more "black swan" events which have huge impacts on the value of the company and has attracted widespread attention from all walks of life,such as the confirmation of huge goodwill and impairments will have.In addition,the gambling agreement signed by the two parties in the merger and acquisition also plays an important role in corporate mergers and acquisitions.As an investor protection agreement,it is worth considering whether it really plays a role in preventing risks and what impacts it has on the valuation of the merger,acquisition company and the recognition of goodwill?.Therefore,it is worth to discussing how to implement the accounting treatment of goodwill based on the gambling agreement and how to choose the subsequent measurement method of goodwill.In this paper,the case study of GuanRi merged with SongXing Electric,considers the option nature of the gambling agreement signed by the two parties,and based on the gambling agreement,the paper uses the cash flow discount method and BS option pricing model to evaluate the SongXing Electric,getting a conclusion that the goodwill is overvalued at the time of initial measurement.Then,the company's current impairment test method was used for subsequent measurement and analysis of goodwill,and the deficiencies were obtained.Next,the simulations of subsequent measurements of goodwill using the system amortization method,impairment testing and system amortization co-existence.The simulation results are compared and analyzed with the economic effects and report items brought by the current goodwill follow-up treatment method of GuanRi,obtaining a suitable method for subsequent measurement of goodwill based on the gambling agreement.This study finds that the gambling agreement is a booster of the overestimation of goodwill in business mergers.However,the current subsequent measurement method of goodwill relies on subjective judgments of accounting,resulting in low quality disclosure of goodwill-related information,and will cause fluctuations in company performance after mergers and acquisitions.consequence.There are advantages and disadvantages to the system amortization method and the impairment test method.The use of either method alone has drawbacks and cannot improve the quality of information disclosure of merger and acquisition goodwill.Under the combination of impairment testing and system amortization,the goodwill of mergers and acquisitions needs to be amortized and included in the current year's profits,promoting to a reasonable valuation of the reorganization of goodwill at the beginning of theperiod,and restraining the company from overestimating the value of goodwill during the merger.At the same time,it can also amortize the amount of consolidated goodwill on the books in a more moderately way,alleviate the impact of a large amount of goodwill impairment on the performance crisis of the enterprise.And to a certain extent,it would prevent listed companies from using goodwill impairment to implement earnings management and improve the quality of accounting information disclosure.The research conclusions of this paper is helpful for the regulatory authorities to formulate corresponding accounting rules for mergers and acquisitions and protect the interests of investors.