Research On Goodwill Impairment Of Global Info Tech Acquisition Of NutsMobi

In recent years,with the deepening of China’s market system and mechanism reform,the capital market is becoming increasingly developed,the number and scale of M&A are increasing year by year.M&A is good for enterprises to expand their scale and improve their competitiveness in a short time,but at the same time,M&A will bring high goodwill to the acquirer,and goodwill impairment problem become more common.The purpose of the performance betting agreement is to hedge the risk of M&A,maintain the fairness of the transaction,strengthen the interests of both sides in merger,reduce the frequency of goodwill impairment.However,in the application process,the performance betting agreement has not had the expected effect,but its high performance commitment may promote the occurrence of the high premium M&A,and the large amount of goodwill may cause the management to manipulate the surplus by using goodwill impairments.Therefore,it is urgent to solve the problem that goodwill impairments still occurs frequently after the performance betting agreement is signed.This paper selects Global Info tech acquires Nuts Mobi as a case,comprehensive analysis of goodwill impairments that still occurs after fulfillment of commitments.First of all,the causes of goodwill impairments are analyzed from the following aspects: the market and valuation before the acquisition,the follow-up management and supervision loopholes after the acquisition,and goodwill impairment test.Secondly,analyzes the implementation of the performance betting agreement,corresponding to the cause of goodwill impairment,concluded that the performance betting agreement can not prevent the occurrence of goodwill impairment,and points out that performance betting agreement may become a new channel to cover the interests of the majority shareholders.Finally,based on the problems found in this case,this paper puts forward some suggestions,including the improvement measures of the pre-merger valuation and the use of performance betting agreement,strength the supervisory mechanism of the M&A,strengthen the responsibilities of the board of directors,have made reasonable suggestions to the small and medium-sized investors in the capital market.Also,this paper puts forward some corresponding solutions to the problem that the follow-up measurement of goodwill is subjective.