Research On The Causes And Economic Consequences Of Goodwill Impairment Of Great Wall Films

Since 2004,influenced by the sixth M＆A wave,Chinese enterprises’ M＆A activities have been gradually active.Among them,with the improvement of Chinese people’s living standards,the upward economic situation and the continuous stimulation of favorable national policies,the scale of mergers and acquisitions of listed companies in the cultural industry has gradually expanded and the frequency of mergers and acquisitions has continued to increase,making great progress in the wave of mergers and acquisitions in China.Goodwill,as a product of M＆A activities,is increasing in the process.The goodwill bubble is particularly severe in the cultural sector because of its intangible assets and hardto-measure nature.Since 2010,goodwill in china,especially in the cultural industry,has experienced three stages: rapid growth,accumulation of bubbles,and bursting of bubbles.The lowest point of goodwill in the cultural industry in 2020 has shrunk by nearly 60%compared with the peak in 2017.After the release of goodwill impairment information,the stock prices of listed companies fell one after another.As one of the major risks of listed companies,the incident of goodwill impairment caused concern in the whole society.This paper selects Great Wall Film ＆ Television,a typical enterprise of goodwill impairment event in cultural industry,as the research object,and adopts case study method as the basic method throughout the whole paper.Firstly,literature research method is adopted to sort out and review relevant concepts and theories on the basis of the proposed problems related to goodwill impairment.Secondly,on the basis of introducing the case background and the case enterprise merger and acquisition event,the paper analyzes the goodwill impairment situation of Great Wall Film ＆ Television by using descriptive statistics and other methods.Then,this paper adopts case study method and other methods to analyze the motivation of goodwill impairment of Great Wall Film ＆ Television from external and internal perspectives.The external motivation is analyzed from the perspective of signal release of regulatory authorities,while the internal motivation is analyzed from the four perspectives of "three-high" merger and acquisition,hidden trouble of performance commitment,lower profitability than expected and earnings management,and it is concluded that the five internal and external factors jointly promote the goodwill impairment of Great Wall Film ＆ Television.Then,the event study method and other methods are used to study the economic consequences of goodwill impairment from the perspective of micro company valuation and macro market value,and the conclusion is drawn that goodwill impairment events have negative effects on the above two aspects.Finally,it puts forward relevant countermeasures and suggestions for listed companies in cultural industry from three aspects: listed companies,regulatory authorities and investors.Starting from the whole process of goodwill generation to impairment,this paper clarified the internal logic of the motivation of goodwill impairment and analyzed the economic results of goodwill impairment,so as to alleviate the risk of goodwill impairment,correct the motivation of mergers and acquisitions of listed companies in Chinese cultural industry,and promote the healthy and sustainable development of Chinese cultural industry.It is of great significance to improve the awareness of the capital market and even the society to prevent the risk of goodwill impairment,and provide new ideas for the formulation and improvement of relevant standards in the follow-up treatment of goodwill impairment.