A Study On The Influence Of Performance Commitment On The Business Performance Of The Acquirer

With the development of economic integration,more and more enterprises choose to enlarge their scale through merger and reorganization.In 2013,the third Plenary Session of the 18 th Central Committee of the COMMUNIST Party of China(CPC)proposed to "promote the cross-regional,cross-industry and cross-ownership merger and reorganization of cultural enterprises",which promoted the merger and reorganization of China's cultural media industry.In 2014,China Securities Regulatory Commission greatly simplified the merger and acquisition process,which further promoted the vigorous development of merger and acquisition and reorganization in the cultural media industry.With the rapid development of mergers and acquisitions in the cultural media market,performance commitment also develops continuously.The original intention of performance commitment is to reduce the loss caused by information asymmetry between the two parties and to protect the interests of the acquier when the target enterprise's performance commitment is not up to the standard through performance compensation.However,with the marketization development of performance commitment,higher performance commitment enhances the M&A valuation,which generates a high premium,which further promotes the development of high performance commitment.Under the interaction of the two,huge goodwill is generated in the cultural media industry.The performance commitment of the target enterprise is not up to the standard,indicating the decline of profitability,and the target enterprise profitability decline,the acquier should take goodwill impairment,thus affecting the listed company's business performance.In order to study the impact of performance commitment on the business performance of the acquier,this paper first analyzes the current situation of M&A in the cultural media industry,and finds that the fulfillment of performance commitment deteriorates with the development of the cultural media industry.Then comes the main part of the paper: case introduction and case analysis.The introduction of the case first introduces the basic information of Tianshen Entertainment,then introduces the M&A events with performance commitment conducted by Tianshen Entertainment from 2015 to 2019,and finally introduces the completion of the performance commitment of the target enterprise.The case analysis is mainly carried out in three parts: first,the reasons for the failure of the target enterprise's performance;second,the impact of performance commitment on the acquirer's operating performance is analyzed from the four aspects of debt paying ability,operating ability,development ability and profitability;finally,the impact of performance commitment on the acquirer's net profit quality is analyzed from the two perspectives of performance commitment period and after performance commitment period.After analyzing the case,corresponding solutions are proposed to solve the problems found in the analysis.For example,it is proposed to promote the reasonable valuation of evaluation institutions to reduce the premium due to the excessively high valuation premium of M&A,it is proposed to reasonably design the commitment period and target of performance commitment for the "high performance commitment",it is proposed to improve the follow-up measurement method of performance compensation for the deterioration of net profit due to the accounting treatment of different performance compensation,and it is proposed to improve the follow-up measurement method of goodwill for the massive calculation of goodwill impairment of Tianshen Entertainment in 2018.In view of the imperfect information disclosure of Tianshen entertainment performance commitment,this paper proposes to strengthen the information disclosure and the supervision of regulatory departments and intermediaries.