Analysis Of The Causes And Economic Consequences For The Impairment Of Goodwill In The Merger And Acquisition Of Lion Roar By Xunyou Technology

In recent years,the government has vigorously supported enterprises in mergers and acquisitions to adjust industrial structure and optimize resource allocation.Enterprises will also choose mergers and acquisitions as a way of external expansion to enhance their core competitiveness.As a result,under the combined effect of national policy incentives and enterprise expansion,M&A activities in the Chinese market continue to be hot.However,as the scale of mergers and acquisitions continues to expand,high premiums have led to a continuous accumulation of goodwill in the growth enterprise market,and the goodwill value of listed companies continues to accumulate.The growth enterprise market gathers a large number of high-tech enterprises,which have a lot of intangible assets that are difficult to measure and have unique core competitiveness.They can be favored by mergers and acquisitions companies,but there are also complex goodwill impairment risks behind them.Goodwill is unique compared to other assets of a company,as it cannot be identified and has strong subjectivity,which increases the difficulty of measuring goodwill.Once an enterprise’s judgment is inaccurate,it will bring significant risks of goodwill impairment,affecting the operation of the enterprise and even disrupting the capital market.In recent years,there have been frequent waves of goodwill impairment in mergers and acquisitions in the growth enterprise market,causing significant losses to investors and setbacks to their enthusiasm.Therefore,goodwill impairment events have become a focus of attention in the capital market.This article analyzes the impairment of goodwill in the merger and acquisition of Lion Roar by Xunyou Technology,mainly using case study method,combined with literature research method,qualitative and quantitative analysis method,comparative analysis method,etc.Based on theoretical summary,it studies the causes of goodwill impairment in the merger and the economic consequences caused by goodwill impairment.Firstly,the article elaborates on the background and significance of the topic selection,reviews and summarizes relevant literature,clarifies research ideas and methods,and forms a logical framework for the research.Secondly,this article summarizes the theoretical ideas related to goodwill,laying a solid foundation for further research.Next,this article provides an explanation of the process,motivations,goodwill,and performance commitments of Xunyou Technology’s acquisition of Lion’s Roar,and conducts an in-depth analysis of the reasons and economic consequences of Xunyou Technology’s acquisition of Lion’s Roar’s goodwill impairment.It is found that high valuation leads to high premium mergers,the target company’s performance commitments do not meet the standards,the synergy effect is not fully realized after the merger,and the management’s motivation for earnings management is an important reason for the impairment of goodwill.In terms of studying the economic consequences of goodwill impairment events,this article concludes that goodwill impairment events can cause short-term stock price declines,long-term value declines,financial performance decreases,and non-financial performance deteriorates.Finally,this article proposes reasonable suggestions for preventing the impairment of goodwill of listed companies from the perspectives of external regulatory agencies,listed companies themselves,and small and medium-sized stakeholders,and summarizes and prospects the entire text.In summary,the article summarizes the theories related to goodwill,adopts a combination of literature research and case studies,and focuses on the merger and acquisition cases of two technology companies with complementary businesses in the internet and related service industries.The aim is to see the big from the small,and focus on analyzing the causes and economic consequences of corporate goodwill impairment,providing reference for stakeholders and policy formulation.