Research On The Measurement And Disclosure Of Goodwill In High Premium Mergers And Acquisitions

Since the 21 st century,the social economy has entered a stage of rapid development,the merger and acquisition activities between enterprises are increasing,and the word goodwill also appears frequently.Since 2010,the high premium M & A projects among enterprises have gradually increased.However,in the early stage of M & A,the relevant criteria for the initial recognition,subsequent measurement and disclosure of goodwill are not clear,which leads to a great risk of impairment of large goodwill formed by M & A.In recent years,the "explosion of goodwill" in the capital market has also occurred frequently,which has a negative impact on the development of enterprises,the interests of investors and the stability of the market.How to reduce the risk of goodwill impairment caused by high premium M & A and avoid the "thunder" event of goodwill is the focus of enterprises,investors and the market.Huayi Brothers is a leading enterprise in the entertainment industry in the mainland.The company entered the peak period of M & A from 2013 to 2015.In these years,it formed a huge goodwill of more than 3 billion yuan,and suddenly withdrawn a large amount of goodwill impairment of 973 million yuan and 599 million yuan in 2018 and2019 respectively.This huge change has attracted many questions from the public,and the reasons are worth exploring.Therefore,this paper selects Huayi Brothers goodwill impairment as a case for specific research.Firstly,this paper reviews the domestic and foreign literature related to the initial recognition,subsequent measurement and disclosure of goodwill.Then,this paper introduces the development of Huayi Brothers and the specific situation of goodwill.Then,this paper analyzes the specific cases from the following perspectives.First,in terms of the initial recognition of goodwill,this paper believes that Huayi Brothers mainly has the following problems: first,the valuation process is greatly affected by the subjective ideas of the managers,and the lack of prudence and objectivity leads to a sharp rise in valuation,and the false high of goodwill is confirmed,which lays the hidden danger of goodwill impairment;second,the motives of M & A are not pure,and there is a suspicion of interest transmission.Secondly,in the follow-up measurement of goodwill,this paper thinks that there are mainly the following problems: firstly,when carrying out the impairment test,the identification of asset group is unreasonable,and the net profit,which is an important reference for the impairment test,is also suspected of fraud;secondly,in the face of many times of substandard performance,goodwill impairment is not accrued,which may lead to the lack of impairment test;Thirdly,there is a suspicion of using the impairment of goodwill to "bathe" the performance;finally,the sudden sale of some of the shares of block selling net and Dongyang vast company resulted in the problem of "hiding" goodwill and "beautifying" statements.Third,in the disclosure of goodwill,there are also the following problems: firstly,the disclosure of goodwill information is not sufficient and complete;secondly,the disclosure of goodwill information is not reliable enough,which affects the judgment of investors and infringes the interests of small and medium-sized investors.Based on the above case analysis conclusions,this paper puts forward corresponding improvement suggestions from the initial recognition,follow-up measurement and disclosure of goodwill.First,in terms of the initial recognition of goodwill,first,we should improve the corporate governance system and establish a systematic star value evaluation mechanism.Second,we should formulate a reasonable gambling agreement.Finally,we should strengthen the guidance and supervision of high premium mergers and acquisitions of star shell companies and loss making companies.Secondly,in the follow-up measurement of goodwill,first,improve the follow-up measurement method of goodwill;secondly,improve the goodwill impairment test procedures;finally,improve the relevant standards,strengthen the guidance and supervision of the follow-up measurement of goodwill.Third,in the disclosure of Goodwill: first,improve the information disclosure criteria,establish goodwill information disclosure mechanism;second,regulatory agencies should strengthen the supervision of enterprises and related institutions.