Research On Goodwill Measurement And Information Disclosure Of Cultural Media Companies

At present,the economic development trend is gradually shifting from high-speed growth to high-quality growth.Most companies choose mergers and acquisitions(M&A)in the fierce capital market competition to maintain their advantages,consolidate their positions,and achieve long-term development goals.As people pay more attention to the needs of spiritual civilization,China has stepped up its support for the cultural industry.Based on a series of favorable policies,cultural media companies have experienced unprecedented prosperity in M&A.However,in view of the “asset-light” nature of cultural media companies,“high valuation,high premium,and high performance commitment” abounds in M&A and restructuring activities.The formation of high-value goodwill through M&A has become a new trend in the development of the cultural media industry,and the resulting impairment risk has also increased along with the increase in goodwill.After lots of cultural media companies having been affected by the huge impairment of goodwill,and the phenomenon of “changes in performance” has frequently occurred in the industry,the supervision of goodwill measurement and information disclosure by relevant departments has become increasingly strict.Goodwill and impairment of goodwill have always been research hotspots in theoretical circles,and turn out to be the key to capital market supervision.A huge amount of goodwill will affect the interests of investors,and the practice of accruing a large amount of goodwill impairment will also directly cause the company’s current profit loss,bring risks to the company’s subsequent operations,and not be conducive to the development of the industry and the healthy operation of the capital market.With the help of the Wind database and various financial information and data in the annual report of the cultural media company,this paper mainly uses Literature Research Method and case Analysis Method to study the goodwill measurement and information disclosure of the cultural media company.Firstly,it sorts out and summarizes the relevant literature on the initial measurement,subsequent measurement and information disclosure of goodwill,sorts out the context of its research and development,and resolving them on account of Entrustment of an agent theory,message asymmetry theory;secondly,it summarizes the initial measurement of goodwill in the cultural media industry,the overview of goodwill impairment,and the current situation of goodwill information disclosure in combination with relevant domestic and foreign standards and take *ST Great Wall as a specific case to analyze the company’s operating conditions from 2014 to 2019 and the development of the entire case.Based on the initial measurement and subsequent measurement of goodwill and the disclosure of goodwill information,it analyzes the problems existing in the handling of goodwill by *ST Great Wall,and proposes recommendations for cultural media companies on goodwill measurement and goodwill information disclosure from a corresponding perspective.In the end,this paper is summarized and the future prospects are put forward.The results of the study found that cultural media companies mainly have the following problems in the process of goodwill measurement and information disclosure: in the initial measurement of goodwill,the valuation premium of the underlying asset is too high,and the high performance commitment indirectly pushes up the goodwill valuation;in the follow-up measurement of goodwill,large amounts of goodwill impairment provision were made,and the provision was arbitrary,the goodwill impairment test method was unreasonable and subjective,and there were major problems in the company’s internal control;meanwhile,in terms of information disclosure,the initial merger cost information and impairment test information disclosure of goodwill was incomplete.The reasons for these problems are:overestimation of the underlying asset merger consideration,strong subjectivity of goodwill impairment testing,difficult operation,excessive concentration of company control,lack of detailed provisions for goodwill information disclosure,insufficient supervision and low cost of violations.Based on the above-mentioned problems,this article puts forward the following suggestions: reasonably determine the price of the M&A target,and beware of high-premium goodwill;establish industry evaluation standards and reduce the company’s discretionary power;improve corporate governance systems and mechanisms to strengthen the company’s internal control construction;improve and refine relevant clauses and guidelines to regulate the content and form of goodwill disclosure;compulsory information disclosure and severely punish violations of laws and regulations.