Empirical Study On The Influence Of Merger And Acquisition Bet Agreement On Goodwill Impairment

According to the accounting standards of enterprises in China,the impairment test of goodwill should be conducted at least at the end of each year to better reflect the actual situation of goodwill.In recent years,the concentrated industrial mergers and acquisitions have contributed to the high risk of impairment of goodwill in the capital market.At present,scholars mainly study the factors that affect the impairment of goodwill from the perspective of value destruction and earnings management.They all study the causes of impairment of goodwill from the perspective of the motive of impairment provision of goodwill in the operation process of the merging party after the completion of the merger activity.Different from other assets,goodwill is generated by mergers and acquisitions.Will the merger premium paid by the acquiring party to facilitate the completion of the transaction have an impact on the impairment of goodwill?Some scholars have shown that there is a positive correlation between merger premium and goodwill impairment,that is,the higher the merger premium,the greater the goodwill impairment in the later period.Merger premium is an important cause of goodwill impairment.The purpose of merger and acquisition is to achieve synergies.Based on market reaction,for the time of merger and acquisition with good expectation,good synergies will be achieved at the time of merger and acquisition,so that the enterprise will receive immediate returns.This part of returns will decrease the impact of merger and acquisition premium.In the case of merger and acquisition,the application rate of bet agreement is increasing,which plays an important role in the merger and acquisition.Through incentive effect theory,real option theory and signal transfer theory,the counterbet agreement positively affects the merger synergy effect and merger premium,and indirectly affects the impairmentof goodwill.However,in the following period,due to its binding force,the vta will have a direct impact on the impairment of goodwill.When this constraint disappears,goodwill impairment may change.Based on this,the wager agreement will have a direct impact on the impairment of goodwill.Based on the data of m&a events and goodwill impairment in smes and chinext from 2013 to 2018,this paper studies how the bet agreement affects m&a and goodwill impairment in the later period from the perspective of the m&a party.The study finds that :(1)The goodwill impairment risk obtained by deducting the merger and acquisition synergies from the merger premium is positively correlated with the goodwill impairment risk,that is,the higher the goodwill impairment risk is,the greater the goodwill impairment will be in the later period.(2)The wager agreement improves the synergy effect of the merger and acquisition,but at the same time brings greater goodwill impairment risk,indicating that the wager agreement increases the merger premium more significantly in the merger and acquisition.(3)There is an inverted u-shaped relationship between the growth rate of bet performance commitment and the synergy effect and goodwill impairment risk of merger and acquisition.The market is more willing to bet on a certain level of growth.(4)During the vindication period,the vindication agreement can effectively inhibit the impairment of goodwill,but when the vindication period ends,the impairment of goodwill will be significantly aggravated.The research shows that the counterbet agreement is a double-edged sword for both sides of the merger and acquisition.This paper has certain research significance,which enriches the research path of goodwill impairment,expands the research in the field of bet agreement,and effectively applies relevant theories to the field of goodwill impairment,promoting the development of these theories.At the same time,under the background of the new accounting standards for goodwill impairment,the impact of m&a on goodwill impairment in China's capital market was empirically tested,which effectively explained the market status quo of goodwill storm in 2018.The bet agreement is a double-edged sword for both sides of the merger and acquisition.This paper provides reference value for the merger and acquisition party to apply the bet agreement toreduce the risk of goodwill impairment.