Research On The Causes And Responses To The Impairment Of Goodwill Of Zhongtai Automobile

In recent years,with the relaxation of M & A policies and the needs of enterprises’ own development,a large number of enterprises compete to carry out M & A activities to seek development opportunities or promote transformation and upgrading.Enterprise merger and acquisition activities have become the normal market.The target enterprises have optimistic expectations for the capital market,which can easily lead to raising the valuation of the target enterprises due to the consideration of external environmental factors,resulting in a large number of merger and acquisition cases with high valuation,high premium and high performance commitment.The high premium leads to the formation of a huge scale of goodwill in the capital market.The inflated M & A valuation and the uncertainty of subsequent business performance produce a large number of M & A goodwill bubbles,which also bury hidden performance risks to the capital market.In the later stage of mergers and acquisitions,if the operating performance of enterprises is poor,goodwill impairment will be triggered,leading to enterprise losses,substantial shrinkage of market value and frequent chaos in the capital market.This paper takes the huge goodwill impairment of Zhongtai Automobile Co.,Ltd.as an example to deeply analyze the generation and impairment process of its goodwill,as well as the impact of its goodwill impairment on the operating performance,stock price and longterm development of the enterprise.Based on the perspectives of macro situation,valuation method,merger and acquisition method,operation situation and surplus management,this paper explains the high valuation of large goodwill impairment,unreasonable performance commitment,poor management of the enterprise itself,suspected profit transmission,cover up and inflated revenue.From the dimensions of regulatory authorities,enterprises themselves and investors,measures such as strengthening supervision,enhancing enterprises’ own ability,choosing reasonable valuation methods,investors attach importance to the risk of goodwill impairment and reasonable investment are proposed.Through case study,the high goodwill generated by premium acquisition will have negative impact on the enterprise and should be treated as expenses;external factors have a great impact on the generation and impairment of goodwill;goodwill impairment should be investigated comprehensively investigated.This paper puts forward countermeasures and suggestions to reduce the risk of goodwill impairment from multiple dimensions,to provide decision-making reference for enterprises with similar problems.