Research On Goodwill Impairment Under High Premium M&A Of Gem Listed Companies

In recent years,with the development of economy,the expanding scale of capital market and the development needs of listed companies,more and more listed companies have started a boom of mergers and acquisitions under the policy support of the state.Although,it is the preferred development shortcut for listed companies to carry out extensive mergers and acquisitions to transform and upgrade or improve their competitiveness,but with the continuous rise of mergers and acquisitions activities,the phenomenon of high performance commitment,high valuation and high premium rate gradually appeared.Since most of the listed companies on GEM are innovative and high-tech companies with rapid development,they have great potential for development in the future.Therefore,combined with the value of listed companies in the future,the listed companies in this sector have a high valuation,resulting in the "three high phenomenon" in the merger and acquisition behavior of the above companies is more obvious.However,the emergence of high premium mergers and acquisitions has brought the growth of high goodwill to the capital market,and at the same time has buried the risk of goodwill impairment for the future development of listed companies.Since 2017,the goodwill thundering behavior of GEM listed companies has occurred frequently.In 2018,the amount of goodwill impairment reached the peak.In that year,there were 481 listed companies in GEM with goodwill,among which 241 listed companies made an impairment provision for goodwill,and the goodwill impairment loss reached 51.842 billion yuan.The impairment of high goodwill not only damages the interests of minority shareholders,but also goes against the good operation of the capital market.So far,goodwill impairment has not only become a hot topic in the capital market,but also caused the focus of the regulatory department.Therefore,in this context,through the combination of literature analysis,case analysis and normative research methods,based on previous research experience,selects the GEM listed company Shuzhi Technology to acquire BBHI in 2017 as an example.Combined with Wind,CSMAR and other databases as well as the data in the annual report disclosed by the listed companies,the focus is on the analysis of the goodwill impairment of the BBHI in 2020,the existing problems and the impact of the goodwill impairment of the BBHI,from which the analysis and summary of the existing problems of the goodwill impairment of the BBHI.And put forward the corresponding countermeasures and suggestions;Then,the corresponding conclusion is drawn.The main conclusions of this paper are as follows: first,high premium merger and acquisition is the main cause of goodwill impairment,because the existence of high premium merger and acquisition increases the risk of goodwill impairment;Secondly,the management’s earnings management motivation is mixed in the process of calculating and withdrawing goodwill impairment,which increases the calculation and withdrawal of goodwill impairment;Third,due to the inadequate disclosure of goodwill information,it provides the management with the opportunity to reduce and cash out.Before the impairment of goodwill,the major shareholders have already cashed out,resulting in the interest loss borne by the minority shareholders alone.Fourth,the provision of goodwill impairment will cause short-term and long-term impacts on listed companies.Short-term impact means that the capital market will react with stock price shocks in a small period of time.The long-term impact will restrict the development of enterprises,cause the increase of financial risks and damage the interests of minority shareholders.Finally,the corresponding enlightenment can be obtained from multiple levels.As for the M&A company,reasonable valuation,careful selection of evaluation methods and strengthening of internal supervision should be carried out in the M&A process.At the level of regulatory authorities,comprehensive supervision should be carried out before,during and after the merger and acquisition of listed companies and the goodwill impairment behavior,so as to guard against the manipulation of goodwill by listed companies,that is,the "performance bath" and benefit conveying behavior in the way of goodwill impairment.For external investors,when choosing enterprises for investment,they should keep a rational choice and carefully judge whether the existence of high goodwill of listed companies matches the future business development situation of listed companies,so as to avoid investment losses.