Research On The Impact Of Concentrated Impairment Of Goodwill In Mergers And Acquisitions In The Small And Medium-sized Board Entertainment Industry

With the rapid growth of China’s economy,China has gradually become a major country in the world’s comprehensive capabilities,and the strategic development goal of a cultural tourism power has also emerged.Subsequently,the Chinese government issued many preferential policies to support the rapid development of Chinese cultural companies.policies to support the development of my country’s cultural industry.The cultural and entertainment industry has become an integral part of cultural tourism,and itself has received a lot of capital attention,which has led to a large number of capital injections.The use of corporate mergers and acquisitions to integrate resources can realize the company’s development and growth more quickly and efficiently.Therefore,corporate mergers and acquisitions have become the norm for the development of enterprises in the entertainment industry in my country.However,entertainment culture companies are often unable to objectively evaluate their company value during mergers and acquisitions because of their own particularities: light assets,hidden liabilities and other factors that account for a large share of shares,resulting in high valuations or even high premiums during some mergers and acquisitions.And the phenomenon of a huge difference in goodwill of the company has also appeared frequently.Once the huge amount of goodwill is impaired,it will cause a great blow to the company’s income,and the company’s reputation has become another black swan hovering over the entertainment industry investment market.Therefore,how to determine the possible impairment in the company’s reputation,how to recognize the negative impact and how to avoid these negative impacts have become the urgent issues for the company to improve.This article mainly takes Alpha Animation and Culture Co.,Ltd.as the main research object.Since Alpha Animation and Culture Co.,Ltd.is the earliest entertainment enterprise listed on the small and medium-sized board in China,its representativeness in the small and medium-sized board entertainment industry is also the strongest.In the process of developing and expanding the scale of the company,it also opened up successful cases of acquiring a number of companies,so the analysis of its company cases is very representative.The article firstly analyzes,summarizes and analyzes through a series of merger and acquisition events in the company’s development process.Secondly,it comprehensively uses the case analysis method and the financial statement analysis method to study the whole process of Alpha Animation and Culture’s merger and acquisition.The research results show that:(1)In the evaluation of the initial stage of goodwill value of Alpha Animation and Culture Co.,Ltd,due to factors such as high valuation and high premium,a huge goodwill has been formed,which has resulted in the formation of subsequent high goodwill reduction.value phenomenon.(2)During the implementation of the post-processing measures for the impairment of goodwill assets,Alpha Animation and Culture Co.,Ltd had a goodwill impairment that should be accrued,but it did not accrue,but accrued a large amount of goodwill impairment at one time.The phenomenon of the value of the company has brought serious financial impact to the company’s operations,and at the same time caused the company’s market value to plummet,which has seriously damaged the corporate image.(3)Due to the unreasonable VAM agreement concluded at the time of merger and acquisition,the subsequent VAM contract could not be executed according to the situation at that time.Further,specific opinions are given in response to the newly discovered problems:(1)It is necessary to reasonably evaluate the merged enterprise during the initial confirmation to minimize the reputation bubble.(2)In ex-post management,it is necessary to improve the method of ex-post measurement of reputation,enhance the effectiveness of the goodwill impairment test,and greatly reduce the loss of goodwill impairment by strengthening the transparency of reputation disclosure and improving the company’s internal control function.(3)Establish a reasonable gambling contract to hedge the loss caused by the impairment of goodwill to the company.Finally,the source of the huge goodwill impairment risk is summarized,so as to provide specific methods for the company to deal with large goodwill impairment losses,and provide corresponding opinions for the company,regulators and shareholders to solve various risks arising from goodwill impairment.