Research On Impairment Risk And Prevention Of Goodwill Of Media Enterprises Merger And Acquisition

In the context of the new normal of the economy,more and more Chinese enterprises carry out industrial transformation through mergers and acquisitions,which witnessed a blowout development in 2014 and 2015.The most frequent m&a activity is in emerging industries,including media,pharmaceuticals and the Internet.From the perspective of the industry,the media industry is in a stage of rapid development and popularization of the mobile Internet,so the media industry market has great potential in the future.In addition,as game companies in the media industry generally have strong profitability and will bring high profit inflow to m&a companies in the future,game media enterprises have become the primary target of many companies' transformation and high premium m&a.The favorable policies and the active mergers and acquisitions market promote the continuous increase of the total amount of goodwill,and the large amount of goodwill formed by mergers and acquisitions also causes the high total amount of goodwill.Huge amount of goodwill adds uncertainty to the future performance of listed companies.Once the performance of the target company declines,it will be followed by the disclosure of impairment accounting information of goodwill of listed companies and the negative news that impairment of assets can erode the net profit of listed companies and drag the operating performance.When the above negative news is released,is also bound to seriously affect the stock price of listed enterprises.In view of the general "asset-light" characteristics of game enterprises,the main value of the company comes from some invisible virtual assets,such as the future profit level,so the income method is often used to calculate the value of such companies.However,the income method tends to be a high evaluation result,which leads to the extremely high premium rate of listed companies,which may reach ten times or more,as described in the case of zhongying interconnection in this paper.At the same time,because the present value of cash flow adopted by the income method is the predicted value,there is great uncertainty,and whether the game company will make profits in the future is also unknown,which causes a huge risk of goodwill impairment in the capital market.In the current capital market,the majority of merger and acquisition cases of media and game companies are cross-border mergers and acquisitions,which further increases the risk brought by information asymmetry.Therefore,the research in this paper focuses on the risk of goodwill impairment,and according to the source of goodwill,that is,the goodwill involved in this paper is the goodwill generated by mergers and acquisitions.In terms of literature review,this paper firstly reviews the nature of goodwill,the identification of goodwill impairment risk,the causes of goodwill impairment,and how to prevent goodwill impairment risk,and summarizes the research achievements of scholars in the above aspects.Then this paper adopts the method of case study to analyze the current m&a industry environment of the media industry,and then analyzes the current situation of goodwill and goodwill impairment in the media industry.The reason why this case is further summarized is that the ratio of goodwill to net assets of zhongying Internet is higher than 100%,and its ratio of goodwill to total assets is higher than 50%,which is typical in the media sector.Therefore,zhongying Internet is selected as the case company in this paper.Then,how to identify the goodwill impairment risk of such mergers and acquisitions is analyzed,mainly from the perspective of the valuation in the preliminary preparation of mergers and acquisitions and the performance compensation commitment in the process of mergers and acquisitions,combined with the case of the target company.Then,when analyzing the impact of the combined goodwill impairment risk on the company,the financial indicators are selected to analyze the capital structure,profitability,solvency and growth ability of the merger enterprise after the goodwill impairment risk from the perspective of accounting research method.After analysis,it is found that the risk of goodwill impairment leads to the decline of the company's ability in these four aspects.Finally,based on the above analysis of the risk of goodwill impairment,preventive measures are proposed on how to prevent the risk of goodwill impairment.This paper believes that the accuracy of valuation should be improved and the high premium should be controlled in combination with the actual environment.In addition,the post-merger integration is also an indispensable measure to prevent the risk of goodwill impairment.At the same time,the advantages of convenient access to information of intermediary organizations should be actively used to prevent the risk of impairment of goodwill.The analysis of this paper is expected to help stabilize the order of the capital market.