Research On The Follow-up Measurement Of Goodwill In Mergers And Acquisitions Of Tianshen Entertainment

In 2014,China’s A-share market set off a wave of mergers and acquisitions,which led to a significant increase in goodwill.In 2018,the centralized accrual of huge amounts of goodwill triggered a goodwill explosion,and related issues such as goodwill impairment and subsequent measurement followed.The huge amount of goodwill generated under the "dual high M&A" has laid a hidden danger for the unreasonable impairment of goodwill in the future.At the beginning of 2019,a number of listed companies collectively experienced significant losses in their performance,which ultimately resulted from a one-time provision for goodwill impairment in 2018.The sudden sharp decline in performance not only dampened the enthusiasm of enterprises but also damaged the confidence of investors.Many scholars attribute this result to improper accounting treatment of goodwill.Since then,the debate on accounting treatment has officially started.At present,the subsequent measurement method of goodwill is the impairment test method,which has its advantages but also has certain drawbacks.Under this method,the subsequent measurement of goodwill is more easily affected by the subjective initiative of management,and can easily become a tool for enterprises to conduct earnings management.Therefore,this article theoretically analyzes the problems existing in using the impairment test method to measure goodwill in listed companies in China,and proposes countermeasures.Based on the basic principles of goodwill impairment,this article combs domestic and foreign research on the nature,measurement methods,formation reasons,and economic consequences of goodwill impairment,focusing on the gaming industry,selecting the continuous merger and acquisition cases of Tiansheng Entertainment,and exploring the problems in the subsequent measurement of goodwill in its merger and acquisition.Firstly,a basic introduction is given to Tianshen Entertainment and the operating status of the target company,and the course of its ten consecutive mergers and acquisitions in five years is sorted out.Secondly,by analyzing the reasons for the formation of high goodwill mergers and acquisitions by Tianshen Entertainment,it was found that there was a significant incentive for Tianshen Entertainment to overestimate and achieve accurate performance standards during the merger and acquisition process.At the same time,there was a lack of clear and transparent goodwill accrual plans during the impairment testing process.The drawbacks of the impairment testing method used by Tianshen Entertainment have been intensively reflected after a goodwill thunderstorm.In order to explore effective follow-up measurement methods for goodwill impairment,timely reflect the true business situation of the enterprise,and prevent the risk of goodwill impairment,this article analyzes the financial situation of Tianshen Entertainment Company under different measurement methods based on the impairment testing method,the systematic amortization method,and the coexistence method of amortization and impairment Changes in operating results and cash flow,and comparative analysis of simulated financial statements.Finally,it was found that for Tianshen Entertainment,a light asset company,the parallel method of amortization and impairment helps enterprises to be more timely and transparent in the subsequent measurement of goodwill,and can to some extent inhibit the management’s motivation for earnings management,which is more reasonable than a single measurement method.Finally,based on the problems encountered in the subsequent measurement of goodwill by Tianshen Entertainment,targeted suggestions are given in order to protect the legitimate rights and interests of the company’s stakeholders and guide the rationality of goodwill impairment.