A Study On The Causes And Effects Of Goodwill Impairment In Mergers And Acquisitions Of Asset-light Enterprises

In recent years,mergers and acquisitions of asset-light enterprises have been in full flow.However,some enterprises overestimate the profit expectations of assetlight enterprises and make irrational mergers and acquisitions,and their merger consideration far exceeds the actual value of enterprises,which forms a huge scale of goodwill.At the end of each year,merger and acquisition enterprises need to conduct goodwill impairment test according to their own business performance and other factors.If goodwill impairment occurs,it will reduce the accounting profit of enterprises,affect the company’s future business development,and damage the economic interests of investors.Asset-light enterprises,such as games and cultural media,have frequent merger and acquisition transactions every year.The scale of goodwill accounts for a large proportion in the industry,and the risk of goodwill impairment is higher than that of other types of enterprises.As a result,if such companies are not well managed and their performance explodes,the impact on the economic interests of companies and investors will be more severe.First of all,this paper makes an overall analysis on the M&A situation,goodwill scale and goodwill impairment of enterprises in the asset-light industry from a macro perspective.Secondly,it conducts a study on M&A cases,analyzes the motivation of M&A behavior based on the background of M&A transactions,and explores the causes of goodwill impairment of M&A from the perspectives of both parties of M&A subjects and management.Furthermore,through the comparative study of the financial index data before and after M&A transactions,the changes in the operation of enterprises caused by the impact of goodwill impairment are analyzed.At the same time,from the perspective of investors,the impact of goodwill impairment on nonfinancial aspects of enterprises is analyzed.This paper draws the following conclusions: First,compared with asset-heavy enterprises,the merger premium of asset-light enterprises is often far higher than the actual valuation of enterprises,which leads to a larger scale of goodwill of the merged enterprises and a higher probability of goodwill impairment risk.Secondly,because the goodwill of the merger and acquisition of asset-light enterprises has a great impact on the operation of enterprises,the management is easy to use accounting means to carry out earnings management.Third,asset-light enterprises have a high rate of return on profits,but they are greatly affected by industrial policy risks and have high operating instability.Therefore,the sound degree of internal control and the change of macro environment are particularly important for their operating development.In view of the problems arising from the above research,the following suggestions are proposed.First,the main M&A enterprises should reasonably evaluate the value of asset-light enterprises before M&A transactions.Second,after the completion of the merger and acquisition transaction,the acquirer shall reasonably evaluate its business risks every year and prudently set aside goodwill impairment.Third,M&A enterprises need to reasonably estimate the expected ability of asset-light enterprises to prevent external risks.Fourth,the enterprise needs to do a good job of internal control system to prevent the abuse of power by the management.Fifth,external regulators should perform their supervisory duties,strengthen the information disclosure mechanism,and make disciplinary announcements against enterprises violating laws and regulations.