Research On The Impairment Of Goodwill In The Acquisition Of Pride By Orient Precision

In recent years,the prevention of financial risks has become one of the main tasks.The risk of goodwill impairment and the large amount of goodwill impairment have become one of the most important financial risks.From the macro level,the listed companies’goodwill value is rising.In 2006,the Ministry of Finance issued accounting standards for enterprises-asset impairment loss regulation,it includes the accounting regulation for the measurement of goodwill.The accounting regulation has changed from the goodwill amortization method into goodwill impairment test method.From then,the listed companies’goodwill showing a significant rising trend,the book value of the goodwill of these enterprises presented the explosive growth in 2014-2016,the cumulative total surpass trillions,until 2018 the trend has slightly reduced,by the end of the third quarter of 2019,total assets of the goodwill of the listed companies of China is 3.11%.Some industries such as film and technology occupy a larger proportion.Therefore,on the macro level,If the listed company collectively withdraw the impairment of goodwill,it will cause a huge impact on the overall capital market.From the micro point of view,the risk of goodwill impairment is an important factor affecting the business performance and business decisions of enterprises.The impairment of goodwill can not only cause the net profit of enterprises in the current year,but also affect the stock price and future financing ability of enterprises.Therefore,preventing the risk of goodwill impairment has become an important researching topic.This thesis is based on the case of dongfang jinggong meagered with Beijing pulaide new energy technology co.,LTD.Through the published information to know the whole process of its acquisition and analyses the goodwill impairment risk of the acquirer dongfang jinggong,put forward targeted Suggestions for the risk of goodwill impairment.This thesis mainly analyzes the cause of the high goodwill,and goodwill impairment risk causes,and the high goodwill impairment risk.To analyze the cause of the high goodwill impairment risk.By analyzing the m&a motivation of diversified industries’acquisitions and others.the original data of valuation method tend to be too higher.Analyze the consequences of goodwill impairment from the changes in profitability and the use of the event method to study the impact of goodwill impairment on the stock price fluctuations of dongfang jinggong analysis.Goodwill impairment risk mainly come from the changes of industrial structure and the principal-agent relationship caused by the original shareholders did not fulfill the duty of loyalty,diligence,performance did not meet performance pledge,synergy effect weakened,human capital losses,internal control weaken,four factors and earnings management motivation significantly increased the risks of the goodwill impairment.Finally,Suggestions are put forward from four aspects:the division of goodwill components,the introduction of a third party to correct the valuation mechanism,the daily management of the impairment risk of goodwill by the use of combined management accounting tools,the standardization of subsequent measurement of goodwill,and the improvement of goodwill information disclosure.The innovation of this thesis is to suggest the division of diversified m&a goodwill premium and payment premium,avoid the diversification m&a premium and payment premium to improve the valuation of the company,and reduce the risk of goodwill impairment.Secondly,it is suggested to use portfolio management accounting tools budget management and strategic map for daily management of goodwill impairment risk.The conclusions of this thesis are that the main reason for the risk of goodwill impairment faced by the case company is that the valuation is too high at the time of merger,which far exceeds the amount of goodwill that can obtain future profitability,forming a huge diversified merger premium.Moreover,the risk of goodwill impairment should become a part of daily risk management.The accounting tools is conducive to preventing the risk of goodwill impairment and improving the quality of goodwill.And goodwill follow-up accounting standards may give the management of goodwill earnings management opportunities.