Research On Goodwill Impairment Under The Premium Merger And Acquisition Of Yinzhijie

Since the beginning of the new century,China’s market economy has strided forward.The overall market scale has been expanding,and the main market bodies have been increasing.The corresponding market economy policies are also keeping pace with The Times to make the enterprises bigger and stronger.In such a context,Chinese enterprises ushered in a round of development wave,and more and more enterprises began to choose mergers and acquisitions as a means to enhance the competitive strength of enterprises,and quite a number of mergers and acquisitions events due to a variety of factors influenced by the characteristics of high premium.All these will lead to the continuous increase of goodwill amount in the financial recognition and measurement of enterprises,and finally make enterprises face more and more threats of goodwill impairment.In recent years our country various industries have a large number of enterprises continuously happen goodwill "Bao Lei" scandal,leading to the company’s performance plummeted,business difficult to continue,more serious is that in addition to the adverse effects on the development,such events will cause the investors interests seriously damaged,hit the investment confidence,the uncertainty for the long-term and stable development of the market as a whole.Based on the M&A between Yinzhijie and Yimeiruantong which formed a huge goodwill in the aftermath of the huge goodwill as the research object,through to a higher degree of completion related research results at home and abroad to explore,and the definition of goodwill,formation mechanism and the cause of goodwill,such as how to prevent the occurrence of goodwill information has carried on the comprehensive study and absorption,Then the following work was carried out:First of all,this paper tries to explore the mechanism of Yinzhijie’s huge goodwill impairment event by starting from factors such as M&A valuation,performance commitment,M&A methods,subsequent measurement of goodwill and the causes of performance decline.Through research,this paper draws a preliminary conclusion that Yinzhijie overestimated the enterprise value of Yimeiruantong when it acquired it,and the performance commitment agreement signed by Yinzhijie lacks comprehensive consideration.The simple use of single M&A means further promotes the formation of unreasonable huge goodwill.After that,the adverse macro environment,the impact of new technology on the overall development of the industry,the intention of the management of earnings management,and the insufficiency of the follow-up accounting measurement methods of goodwill have emerged,which eventually led to the occurrence of huge goodwill impairment events,making the enterprise suffer economic blow.Secondly,this paper deeply analyzes the existing public data of the enterprise,and conducts research from the perspective of stock market reaction,the impact on financial performance and the impact on enterprise value,in order to make a reasonable evaluation of the economic consequences of Yinzhijie’s huge goodwill impairment event on the enterprise.Finally,based on the goodwill impairment mechanism obtained from the above research,this paper puts forward corresponding preventive suggestions.Before M&A transaction,enterprises should conduct in-depth analysis of the target enterprise and its industry,grasp its development trends,and on this basis,relying on the industry regulator’s more careful and strict pre-audit work,reduce the probability of unreasonable huge goodwill formation.In mergers and acquisitions,enterprises should fully sufficient cautious and rational attitude,choose carefully,the appropriate valuation methods,as far as possible in the performance pledge agreement set comprehensive evaluation indexes,constructing multiple security system of game,choose distributed mergers and acquisitions as a means to ensure that appropriate,accurate and merger and acquisition goodwill,to prevent unreasonable m&a bubbles;After the completion of the M&A transaction,various means should be taken to ensure the core business capabilities of the enterprise,pay attention to the industry trend and policy guidance in real time,so as to ensure that the enterprise has stable performance.In addition,enterprises should carry out reasonable reforms on the traditional follow-up measurement methods of goodwill,and external supervisors should urge enterprises to increase the continuous disclosure of goodwill related information to ensure that improper and accurate impairment of corporate goodwill will not be incurred due to the earnings management intention of the management.To sum up,in this paper,based on the above research concluded that mergers and acquisitions exchange of unreasonable high reputation may be harmful to the future development of the enterprise,and in addition to regulating the behavior of the enterprise itself,the macro environment and industry trends and other factors also may appear goodwill impairment,and it is for this consideration,Enterprises should start from the whole time and multi-subject of M&A transactions to prevent the impairment of huge goodwill.