A Case Study On Goodwill Impairment Of HY Film & TV Company Under High Premium Merger

With the rapid development of China’s economy,our country has gradually become the top country in the global comprehensive strength,and the strategic development goal of a cultural power has emerged.Immediately,the state issued a series of policies to help the development of cultural enterprises to help the cultural industry grow and develop.As an important part of the cultural industry,the film and television industry is naturally welcomed by the capital market.With the influx of a large amount of capital,the integration of resources through enterprise merger can develop more quickly and effectively,and merger and reorganization has become the norm for enterprises in the film and television industry.However,due to its own nature: light assets,star assets,etc.,it is difficult to evaluate its enterprise value during merger,which leads to high valuation and high premium during partial merger,thus bringing a lot of goodwill.Once the huge goodwill is devalued,it will bring huge impact to the profits of enterprises,and goodwill will become another black swan hovering in the capital market of film and television industry.Therefore,how to identify the risk of goodwill impairment and how to effectively avoid this risk has become an urgent problem to be solved.This article takes HY Film and Television Company as the research object.HY Film and Television Company is the first listed film and television company in China,which has strong representativeness in the industry.At the same time,in the process of development and growth,it has set a precedent for acquiring star companies,so it is representative to analyze it.Firstly,this article combs and analyzes a series of high-premium mergers and acquisitions.Secondly,by using the methods of case analysis and financial statement analysis,it is found that:(1)HY Film and Television Co.,Ltd.produced a lot of goodwill in the initial stage of goodwill acquisition due to high valuation and high premium,which led to the subsequent impairment of high goodwill.(2)During the follow-up treatment of goodwill,HY Film and Television Co.,Ltd.has the phenomenon that it should accrue goodwill impairment,but it has not accrued and accrued huge goodwill impairment at one time,which brings financial risks and operational risks to the business operation,and at the same time causes the company’s stock price to plummet and damages the company image.(3)Unreasonable signing of gambling agreements during merger,invalidation of subsequent gambling agreements,etc.Thirdly,according to the problems found,the corresponding suggestions are put forward:(1)The merged enterprises should be valued rationally in the initial confirmation to reduce the goodwill bubble.(2)The follow-up treatment should optimize the follow-up measurement method of goodwill,improve the operability of goodwill impairment test,strengthen the transparency of goodwill information disclosure,and strengthen the internal control of enterprises to reduce the risk of goodwill impairment.(3)Sign a reasonable gambling agreement to hedge the damage caused by goodwill impairment.Finally,it summarizes the sources of huge goodwill impairment risk,and puts forward specific countermeasures for enterprises to deal with the huge goodwill impairment risk,and puts forward relevant suggestions for enterprises,regulators and investors to deal with the risks brought by goodwill impairment.