Impairment Of Goodwill And Economy Under High Premium Merger And Acquisition Research ——Taking JX Culture Company As An Example

With the rapid development of China’s economy,state and local policies strongly support cultural industries.The improvement of people’s material level has stimulated the upgrading of cultural consumption,and the increase in the number of television advertisements has led to the further development of the film and television industry,so more and more enterprises choose to enter the film and television industry.The number of M ＆ As triggered is also increasing,as is the amount of associated capital,many of which are premium M ＆As.Because the film and television industry has its special enterprise nature,some assets cannot be accurately valued at the time of acquisition,which can lead to high goodwill.Between 2013 and 2016,JX Culture formed a huge goodwill under a wide range of mergers and acquisitions.If a huge goodwill impairment occurs,it can affect all aspects of the company.Therefore,protection against goodwill impairment risk has become an issue of special concern and urgent need to be addressed by the film and television industry.This paper takes JX Culture,whose primary business is tourism development,as the research object.Since 2014,JX Culture has carried out cross-industry mergers and acquisitions and formulated its development strategy to enter the film and television industry.Choosing to buy the Beijing Ferris wheel cultural media company,signed the relevant performance commitment,began the journey into the film and television culture industry.Since then,we have acquired chongqing guosetianxiang,beijing century partner and zhejiang xinghe culture company,so that the resources of the enterprise can be integrated and the future structure of the industry more clear,so as to create an industry-wide cultural media group.This paper firstly introduces the basic situation before and after the transformation of JX Culture Company,and combs through its M ＆ A behavior during the three-year period,including the financial situation of the M ＆ A parties,goodwill confirmation and goodwill impairment.Secondly,the reasons of JX Culture’s high-premium M ＆ A and the reasons of the huge goodwill impairment are emphatically introduced,and finally the related consequences for JX Culture under the circumstances of the huge goodwill impairment are analyzed and summarized.Through the summary of the problems related to the impairment of JX Culture Company’s great goodwill,it is found that:（1）the reason for the high premium M ＆ A of JX Culture Company is the strategic transformation,the expansion of industry scale and the consolidation of industry resources driven by the policy dividend.（2）The impairment of JX Culture’s goodwill is attributable to a high premium in valuation methods,inadequate disclosure policies,and changes in operational and industry policies.More importantly,it may be due to performance manipulation and earnings management by management.（3）The effect of goodwill impairment at JX Culture is not only a decline in the share price,but also a negative impact on the company’s reputation,the departure of senior executives and the divestment of shares,as well as a negative impact on long-term operations and investors.Finally,according to the analysis and discussion of the above aspects,the risk prevention suggestions of goodwill impairment are proposed,and tries to deal with the risk of goodwill impairment from three aspects: internal company angle,market supervision angle and investor angle.