Analysis Of The Motivation And Economic Consequences Of Goodwill Impairment In Corporate Merger

With the further development of China’s market economic system,it provides good opportunities and basic conditions for enterprises to seek extended development through cross-border mergers and acquisitions.Especially since 2014,the boom and prosperity of the capital market have driven all kinds of mergers and acquisitions.In order to quickly integrate technical resources,play the synergistic effect of mergers and acquisitions,and increase new profit points,some enterprises have adopted high premium mergers and acquisitions,which also has a severe shock impact on corporate goodwill.After 2018,the frequent occurrence of corporate goodwill "thunder" events has also sounded the alarm for listed enterprises,and the problem of goodwill impairment has also attracted the attention of many experts and scholars.As a leader in China’s media industry,Liantronics Optoelectronics has achieved business integration and development through continuous high-premium mergers and acquisitions in recent years,and has also produced significant goodwill impairment provision,which is bound to have many impacts on the future development of enterprises and the economic effects of enterprises.Based on this,this thesis studies the motivation and economic consequences of goodwill impairment in the context of high-premium M&A.Taking Liantronics Optronic’s acquisition of Time-sharing Media,Lima Network,and Ep Media as the case study,it analyzes the goodwill impairment of Liantronics Optronic in this period.On the one hand,it is an in-depth study of goodwill impairment caused by high-premium merger and acquisition activities initiated by Liantronics Photoelectric;on the other hand,combined with financial data from2015 to 2019,it analyzes the economic effect of goodwill impairment on enterprise composition.According to the research results,the motivation of corporate goodwill impairment can be more clearly understood,which is conducive to the management of listed companies after high premium merger and acquisition.Summarize the impact of high premium M&A from multiple levels,summarize the chain impact of M&A on goodwill impairment and enterprise development,and then put forward corresponding prevention and control strategies,strengthen the internal control of enterprises in the process of high premium M&A,and avoid the adverse economic effects of goodwill impairment,aiming at providing a reference paradigm for enterprise operation and management under the background of high-premium M&A.This thesis divided into the following four parts:The first part is an introduction and a theoretical overview.Firstly,the research background and significance of this thesis are introduced,and the research ideas and research methods of this thesis are formulated by combing and reviewing domestic and foreign research literature.Secondly,the definition of the concepts related to goodwill impairment in corporate M&A is expounded,the motives,goodwill impairment factors and general economic consequences of goodwill impairment are summarized,and finally the relevant theories of M&A are summarized.The second part introduces the M&A case of Liantronics Optoelectronics.This section introduces in detail the M&A process,M&A motives,recognition measurement of goodwill and goodwill impairment of Liantronics Optoelectronics’ acquisition of Timeshare Media,Lima Network and AP New Media,and puts forward the impairment problem of goodwill in Liantronics Optoelectronics’ acquisition.The third part is a case study of the merger and acquisition of Liantronics Optoelectronics.Firstly,the impairment drivers of Liantronics Guang E-commerce reputation are analyzed from three aspects: the initial recognition amount of Liantronics Guang E-commerce Reputation,the failure of the acquired party to meet the performance commitment and the impact of earnings management motives on the goodwill impairment test,and secondly,the economic consequences of Liantronics Guang E-commerce reputation impairment are analyzed from the market effect,financial effect,equity value effect and enterprise value effect.Finally,through the analysis of the M&A case of Liantronics Optoelectronics,it is concluded that goodwill impairment risk is prone to occur in high-premium M&A.Failure to meet performance commitments may result in goodwill impairment;Impairment testing expands the scope for corporate earnings management;The impact of goodwill impairment on the economic consequences of a business.At the same time,it summarizes the relevant enlightenment of enterprise mergers and acquisitions: standardize the initial measurement of corporate goodwill;Optimize the goodwill impairment testing process;Standardize the disclosure of corporate goodwill impairment information;Strengthen the integration and coordination effect of high-premium M&A;Scientific prevention of surplus management.