Research On Impairment Risk Of Guowang Gaoke Goodwill In Dongfang Shenghongs Acquisition

The 19 th National Congress of the Communist Party of China pointed out that it is necessary to further promote the healthy development of multi-level capital markets.With the continuous development of my country’s capital market,mergers and acquisitions of listed companies have become more and more common.In recent years,the number of mergers and acquisitions and transaction amounts of listed companies have repeatedly hit record highs.While corporate mergers and acquisitions and restructuring can enhance market vitality,it will also bring a series of uncertain high risks.Especially in the current high-premium mergers and acquisitions,industry development,market prospects,and degree of integration will all have an impact on the future business performance of mergers and acquisitions.Uncertainty,and cause the risk of impairment of goodwill.In the annual reports released by A-share listed companies in 2018,729 companies reported impairment losses on goodwill.The total impairment of goodwill reached 112.153 billion yuan,which was the first year in which A-share goodwill losses exceeded 100 billion yuan.At the same time,the risk of impairment of goodwill in corporate mergers and acquisitions has attracted more and more attention and attention from my country’s regulatory authorities.The "Accounting Regulatory Risk Reminder No.8-Goodwill Impairment" issued by the China Securities Regulatory Commission in November 2018 provides a reminder on the accounting regulatory risk of goodwill impairment,and requires companies to know how to reasonably avoid the risk of goodwill impairment in M&A transactions,To avoid unnecessary losses.The impairment of goodwill in mergers and acquisitions will not only affect the business performance of the company,but also bring about changes in the stock price,harm the interests of investors,and even affect the safety and stability of the entire capital market.In this context,studying the risk of goodwill impairment in corporate mergers and acquisitions has important practical significance for standardizing corporate mergers and acquisitions,improving market supervision,safeguarding investor interests,and ensuring the safety and stability of the capital market.This paper takes the goodwill impairment of Dongfang Shenghong’s acquisition of Guowang Hi-Tech as an example,conducts a systematic study on the risk of goodwill impairment in enterprise mergers and acquisitions,identifies the risks of enterprise goodwill impairment,and establishes the enterprise’s goodwill impairment Risk management system,and propose measures to avoid the risk of corporate goodwill impairment.In the research process,the first brief introduction of the merger transaction process of Oriental Shenghong’s acquisition of Guowang High-tech,combed its process of accruing goodwill impairment,and found that in the process of mergers and acquisitions,due to the existence of information asymmetry and synergy between the two parties before the merger The problem of overestimation has caused loopholes in the process of accounting for impairment of goodwill,and the prevention of goodwill impairment risks is not effective.At the same time,accounting for impairment of goodwill has also caused a comprehensive decline in the company’s market performance and financial performance..Secondly,this article identifies and evaluates the goodwill impairment risk of Dongfang Shenghong’s acquisition of Guowang High-tech,and combines the analytic hierarchy process and fuzzy comprehensive evaluation method to rank the identified risk factors,and carries out the goodwill impairment risk.Quantitative Analysis.Finally,it puts forward suggestions on the prevention of impairment of goodwill in Dongfang Shenghong’s acquisition of Guowang Hi-Tech,and provides enlightenment for other companies to prevent the risk of impairment of goodwill in the process of mergers and acquisitions.Through research,it is found that Orient Shenghong acquired Guowang Hi-Tech out of the motivation of backdoor listing,exerting synergy effects and adapting to the needs of the macro background.In the process of M&A,due to the game between the parties to the M&A,information asymmetry,and the synergy effect after M&A is overestimated,goodwill impairment occurred.The appearance of goodwill impairment has significantly reduced the market performance and financial performance of enterprises.Through the identification of goodwill impairment risks,it is found that the external risks of Oriental Shenghong’s acquisition of Guowang Hi-Tech include economic risks,policy risks,technical risks,market risks,etc.,and internal risks include valuation risks,payment risks,financing risks,and industry risks.Integration risk,internal control risk,control right risk,etc.Through risk assessment,it is found that the degree of risk of policy risk,market risk,valuation risk,industry integration risk,payment risk,etc.is significantly higher than other risks.Based on this,in order to avoid the risk of goodwill impairment,this article puts forward measures such as paying attention to the potential risks before mergers and acquisitions,strengthening the management of the target company,and reasonably avoiding risks,and provides enlightenment on the goodwill impairment risks of other companies in the process of mergers and acquisitions.