Research On Goodwill Formation And Impairment Under The Continuous Merger And Acquisition Of Wanda Film

With the rapid development of our country’s economy,the people’s demand for spiritual culture is increasing day by day.The state has introduced a number of favorable policies to help the cultural industry develop and grow.As an important part of the cultural industry,the film and television industry has attracted a large amount of capital inflows,so the mergers and acquisitions of film and television companies in the market are becoming more and more frequent.However,the film and television industry is characterized by light assets,and it is difficult to assess the value of the M&A target during mergers and acquisitions,resulting in high premiums for some mergers and acquisitions,which in turn creates high goodwill.Once the high goodwill is formed,it will face the risk of impairment,increase the uncertainty of corporate performance,and even cause losses to investors.Therefore,how to prevent the risk of goodwill impairment has become an important topic at present.This paper selects Wanda Film as the case study object,mainly considering that Wanda Film is a leading company in the film and television industry in terms of assets and box office.In the early stage,it accumulated a high amount of goodwill through continuous mergers and acquisitions,and in the later stage,it calculated the increase in goodwill twice.representative and influential.This paper first reviews the literature and theories related to goodwill,and then analyzes a series of mergers and acquisitions activities of Wanda Films in recent years.Development trend,integrate upstream and downstream industry chains,realize diversified development,carry out continuous mergers and acquisitions from 2014 to 2019,and accumulate more than 10 billion goodwill;second,Wanda Films in the follow-up process of goodwill Insufficient reasons for the provision of goodwill impairment,subjectivity in the setting of relevant indicators for impairment testing,and imperfect information disclosure have affected the rationality of the high-value goodwill provision;There are many reasons for the value of the value.In addition to the high goodwill formed by the high-premium mergers and acquisitions in the early stage,the performance of the acquired company does not meet the standards and the company’s management’s motivation for earnings management are also the main factors that cause goodwill impairment.Fourth,the impairment of goodwill in Wanda Films not only caused the decline of some financial indicators,but also caused the company’s stock price to drop,causing losses to investors and negatively affecting the development of the company.Finally,this paper puts forward specific suggestions from the perspective of company managers,industry regulators and investors to prevent the formation of high-value goodwill and the risks caused by the impairment of high-value goodwill.