Causes And Economic Consequences Of GEM Listed Companies’ Goodwill Impairment

China’s IPOs came to a standstill around 2013,and with the support of government policies,companies started a wave of mergers and acquisitions.Mergers and acquisitions is often accompanied by high valuations of goodwill,and since 2018,many companies have experienced "big changes" in performance due to the expiration of their performance commitment periods,resulting in frequent goodwill "thunderstorms".According to statistics,goodwill "thunderstorms" mainly occur in asset-light enterprises,such as software and cultural media.The emerging software and cultural media companies are mainly listed on the GEM,and in this context,it is relevant and far-reaching to discuss the causes and economic consequences of goodwill mines on the GEM.This paper collates the existing domestic and international literature on goodwill through the literature research method,outlines the current status of research on the nature of goodwill,subsequent measurement of goodwill,factors affecting goodwill impairment and economic consequences,and makes a literature review.This paper adopts agency theory,signaling theory,and synergy theory as the theoretical basis for the subsequent case analysis.Through the comparative analysis method,the factors affecting goodwill impairment in GEM are compared with those in the main board,and the special characteristics of GEM in terms of goodwill impairment are pointed out.Through the case study method,in the case study section,this paper briefly describes the company and the related background,understands the process of Govinda’s M&A and analyzes the motives of Govinda’s successive M&A,and analyzes the reasons for Govinda’s large goodwill impairment and the economic consequences caused by the goodwill "storm",and analyzes the adjustment in its subsequent operation.We also analyze the economic consequences of the large goodwill impairment and the "goodwill crash",and analyze the adjustments in subsequent operations.This paper gives suggestions and countermeasures to prevent goodwill impairment in terms of valuation methods,information disclosure standardization,subsequent measurement methods,and regulatory efforts in response to the causes and current situation.The significance of this paper is to reveal the causes of goodwill impairment and the economic consequences of goodwill "mines" in the GEM by comparing the GEM with other boards in terms of goodwill impairment.The purpose is to reduce the frequency of goodwill impairment that leads to "thunderstorms",enhance the confidence of small and medium-sized shareholders in the market,and reduce the negative impact of information asymmetry.Improve the M&A and restructuring system of GEM listed companies and the financial system including goodwill impairment.