Research On The Causes And Consequences Of Performance Commitment And Goodwill Impairment In Huayi Brothers Mergers And Acquisitions

Due to the gradual development of China’s social capital market economy,the M ＆A behavior and scale of listed companies have increased unabated.M＆ A is one of the main methods for enterprises to further improve their core competence and development achievements.As the main part of M＆A,performance commitment is increasingly used in the acquisition boom because it has the advantage of reducing the information asymmetry of all parties.Although performance commitment can reduce the risk caused by the information asymmetry of trading parties to a certain extent,due to the increasingly prominent phenomenon of "high premium and high performance commitment" in acquisition,a large number of performance commitments cannot be realized,and the frequent occurrence of performance diving events after the performance commitment period,high goodwill impairment has become a common phenomenon,especially in the film and television industry.Based on this problem,this chapter will take Huayi Brothers as an example,by analyzing its three classic high premium acquisition cases,explore the relationship between its high performance commitment and goodwill impairment,as well as the resulting socio-economic consequences,and put forward relevant suggestions.This thesis mainly takes Huayi Brothers as a case study,comprehensively uses the methods of literature analysis and financial analysis,and on the basis of clarifying the high performance commitment and goodwill impairment of Huayi Brothers,analyzes the relationship between performance commitment and goodwill impairment,the possible causes,potential risks and economic consequences of high performance commitment and goodwill impairment.After in-depth research,this thesis draws the following conclusions:（1）From the analysis of Huayi Brothers’ three typical high performance commitments and goodwill impairment,the relationship between performance commitments and goodwill impairment mainly lies in: high performance commitments promote the generation of goodwill impairment,the failure of performance commitments to meet expectations affects the rationality of goodwill impairment,and high performance commitments make the subsequent measurement of goodwill have earnings management motivation;（2）The main reason for goodwill impairment may be that the acquisition value is too high,or the ultra-high acquisition value creates potential opportunities for goodwill impairment.The second is the evaluation method under the income method,which pushes up the goodwill.Because this method is to judge the future development potential of the enterprise and predict the operating ability and the profit level that can be achieved,it is faced with great subjectivity and uncertainty,which is easy to lead to the high final result.In addition,the uncertainty and high risk of the media industry and the potential interest transmission motivation in the event are the main reasons for the impairment of high goodwill;（3）From the analysis of the business consequences of goodwill impairment in this M＆A case,it can be attributed to the following aspects: goodwill impairment changes the capital structure,worsens the solvency and profitability,reduces the operation stability,and causes the decline of stock price,which is likely to indicate that Huayi Brothers’ high premium M＆A is not recognized in the market.Combined with the research results,this thesis finally puts forward some suggestions:reasonably setting performance objectives and enriching performance commitment assessment indicators,improving the valuation method and goodwill impairment test process of the target enterprise,strengthening the disclosure of goodwill information and the construction of internal control system,hoping to be used for reference for other companies in the film and television industry.