Study On The Reasons And Preventive Measures Of Goodwill Impairment In Transnational M & A

According to relevant data,in recent years,the number of mergers and acquisitions transactions and the flow of transnational investment have been increasing.With the high premium acquisition is a huge goodwill,which may bury the curse of goodwill impairment and bring operational risks to the enterprise,or even turn profit into loss.Therefore,the cause of goodwill impairment has become a research hotspot for scholars.With information asymmetry theory,target setting theory and synergistic effect theory,analysis times health before LSG,merger and goodwill impairment factors after m & a,and then found the impairment factors,to the analysis results and Suggestions,but also reflect on the lack of this paper.This paper finds that compared with domestic m & A,the goodwill impairment factors of cross-border M & A are as follows: First,before the merger,the enterprise value is easier to be overestimated,including the poor financial situation of the acquired enterprise,the unreasonable evaluation method,the serious dependence on suppliers and the risk of policy changes.Second,there are loopholes in the Earn-out agreement in the merger,the performance investigation period is too short,and the single investigation index has an impact on the goodwill impairment.Third,which is embodied in three changes of financial indicators: financial synergies effect,management synergies effect and operation synergies effect.In view of the above goodwill impairment factors,four measures are put forward: first,reasonable determination of the transaction price of the acquired enterprise,including specific measures such as reasonable evaluation of the enterprise value,full consideration of transnational policy change risks and the setting of premium security line.Second,in the process of signing the Earn-out agreement,refine the performance inspection terms,extend the performance inspection period,and enrich the inspection indicators.Third,we can consider directly introducing performance commitment agreements in cross-border mergers and acquisitions.Fourth,after the merger and acquisition,pay attention to the management of foreign enterprises,improve the ability of resource integration and other suggestions,to provide reference for the reputation impairment risk prevention of similar cross-border merger and acquisition dealers in this industry.