Research On Goodwill Impairment In Qingsong’s Merger And Acquisition Of Noxbell

In recent years,with the rapid development of the domestic economy and the gradual adjustment of industrial structure,the State Council has issued the "Opinions of the State Council on Further Optimizing the Market Environment for Enterprise Merger and Reorganization",encouraging enterprises to choose the method of merger and reorganization to optimize their own industrial conditions.Enterprises choose to optimize themselves through mergers and acquisitions and move towards the next new height.Under the dividend of this reform,the frequency of mergers and acquisitions by listed companies in the industry market has increased year by year,and cross industry mergers and acquisitions have become an important means for enterprises to transform from traditional to emerging industries.When choosing the acquiring party,the primary consideration for enterprises is whether they can bring higher economic benefits to the enterprise and whether the enterprise can successfully transform through this.However,under this condition,companies tend to pay higher acquisition prices to obtain the expected future value of the acquired party and gain higher favor and trust from market investors.Enterprises will use restrictive conditions such as signing performance commitments as follow-up guarantees.If the acquired party fails to fulfill performance commitments or reluctantly fulfills performance commitments through earnings management,this will greatly increase the operational risk of the enterprise.Additionally,due to the high amount of consideration paid during the initial stage of the merger,high goodwill will be formed,which will ultimately result in significant impairment of goodwill.Due to the continuous high frequency of mergers and acquisitions,goodwill thunderstorms have also occurred frequently,which not only greatly disrupts the harmonious market order,but also harms the vital interests of many small and medium-sized investors.In this context,this article selects Fujian Qingsong Co.,Ltd.’s acquisition of Nox Bell Cow Co.,Ltd.as a case study,and uses methods such as case study and comparative analysis to conduct research on the case.The focus is on analyzing the acquisition process of Qingsong Co.,Ltd.,the reasons for the provision of huge reputation impairment,and the economic consequences of goodwill impairment.Research has found that the main reasons for the significant impairment of Qingsong Shares are:(1)Qingsong Shares chose to use the income method as the evaluation method in the early stages of the merger,resulting in an excessively high valuation of Northbell during the merger,and a high premium formed a huge amount of goodwill;(2)The merger and acquisition activities carried out under the conditions of expanding the industrial structure of Qingsong Shares and transforming the market,but the final synergy effect of the merger and acquisition was not good;(3)Qingsong Group did not timely provision for impairment of goodwill during the decline of Nox Bell Cow’s performance,but delayed the disclosure and provision of impairment of goodwill,indicating a motivation for earnings management.At the same time,analyzing the economic consequences from both market performance and financial performance,it can be concluded that Qingsong’s provision for huge goodwill impairment has caused the company’s stock price to plummet from a high point to the lowest point,greatly affecting various financial indicators.This not only damages the internal profitability of the enterprise,but also harms the vital interests of many investors.Finally,optimization suggestions were proposed to enterprises and regulatory authorities: optimizing evaluation criteria,standardizing performance commitments,transforming subsequent measurement methods,strengthening information disclosure,cautiously adopting mergers and acquisitions,and achieving synergies for enterprises;For regulatory authorities,it is necessary to strengthen supervision over the market and evaluation departments,fully ensure the fairness and transparency of the market,and reduce the occurrence of such huge goodwill impairment events.