A Study On The Goodwill Of Gem Listed Companies Based On Performance Commitment

In recent years,as the mergers and acquisitions in GEM has become increasingly frequent,risk behind asymmetric information is also in the spotlight,especially the acquirer cannot grasp the real value of the m&a targets clearly and accurately,also they cannot reach the rational judgment on the underlying assets,this phenomenon causes more and more listed companies have started to use “performance pledge” to avoid the risk of m&a.As the same time,CSRS has also carried out effective supervision on m&a and performance commitment in order to maintain the orderly conduct of m&a transactions and promote the healthy development of GEM market.But even so,listed companies changed profits into losses by the target companies didn't implement commitment is still widespread,performance commitment promote mergers and acquisitions smoothly as well as causing huge goodwill,and the huge goodwill impairment will not only put the GEM listed companies into the verge of bankruptcy rick,disrupt the normal order of the growth enterprise market,and also harm the interests of small and medium investors in the future.This paper focuses on the phenomenon of goodwill impairment's outbreak on GEM in2017.By studying the impact of performance commitments on the goodwill of the listed companies on GEM,this paper aims to find out the direct cause of goodwill impairment on the listed companies on GEM and control the risk of huge goodwill impairment on company performance from the source.Firstly,this paper summarizes the basic theories of performance commitment,goodwill impairment and merger goodwill of GEM.Secondly,through the study of the case of Jianruiwoneng's acquisition of Wotma,we could understand the motivation of GEM's mergers and reorganizations,and analyze the impact and economic consequences of performance commitment on the recognition and impairment of GEM listed companies' goodwill from the perspective of internal enterprise structure and external market environment.Finally,it summarizes the problems existing in the performance commitment of business combination,and proposes solutions from the three aspects of GEM market,goodwill recognition and goodwill impairment,in order to contribute to the good development environment of GEM market.This paper aims to performance research of commitment related to the merge goodwill of GEM,for the current GEM market,because of unabling to meet the outstanding achievement in performance crisis phenomena provide advice and reference,hope the GEM listed companies can carefully choose acquisition targets and evaluate the reasonable value of them,understand the risk behind the performance pledge agreement and goodwill correctly,try to increase the GEM listed companies' goodwill information of decision relevance.