Research On Goodwill Impairment Of A-share Listed Companies In China

With the continuous changes and vigorous development of China’s economic market,government departments have successively promulgated a series of policies and measures on M & A.The establishment of the Beijing stock exchange in 2021 will also continue to promote the M & A of listed companies.However,due to the excessive consideration paid by the company in the process of M & A,the amount of goodwill will be greatly increased,and the risk of goodwill impairment faced by the enterprise will become greater.If the company cannot find the problem of goodwill impairment from the root in time,the subsequent development of the enterprise will be greatly affected.According to statistics,the stock of goodwill in China’s A-share market in 2011 was 135.594 billion yuan,and the impairment of goodwill was 931 million yuan.By 2019,the stock of goodwill in the market was 1259.048 billion yuan,and the impairment of goodwill was 129.489 billion yuan.Although the amount of goodwill impairment decreased in 2020,there are still over trillion goodwill stocks in the market,and the possibility of goodwill impairment in the future has not been reduced.Therefore,it is of practical significance to study the causes and effects of goodwill impairment of listed companies.Firstly,it analyzes the general situation of goodwill and goodwill impairment in China’s A-share market.From the data of A-share listed companies in recent ten years,the goodwill stock in the market is large and the risk of goodwill impairment is high.The market was most affected by goodwill impairment in 2018.From the goodwill and goodwill impairment among various sectors,the gem is more vulnerable to goodwill impairment than the main board.From the perspective of goodwill and goodwill impairment among industries,the growth rate of goodwill and impairment in IT service industry is faster.Therefore,feilixin,the company with the heaviest goodwill impairment loss in the IT service industry on the gem in 2018,is introduced as the case study object of this study.Secondly,taking feilixin goodwill impairment event as the research object,this paper focuses on the causes and impact of goodwill impairment.This paper studies the causes of goodwill impairment by using the methods of literature research,case analysis and financial index analysis.It is found that: the payment method of share based payment for merger consideration,the insufficient risk consideration when the evaluation company adopts the income method,the high premium of M & A assets caused by the agreement of high performance commitment and compensation agreement,the signs of impairment of the company’s goodwill during the operation period and the motivation of earnings management,Will promote the impairment of goodwill.Using the financial index analysis method and event research method to study the impact of goodwill impairment,the study found that goodwill impairment will have a negative impact on the company’s stock price in the short term,and significantly reduce the company’s solvency,profitability and growth ability,with little impact on the company’s operating ability.Based on the above research,finally,the paper gives relevant suggestions to the standards,regulators,evaluation institutions and M & A companies,and believes that the relevant accounting policies should be improved from the perspective of improving the subsequent measurement method of goodwill,the content of goodwill impairment test and the payment method of merger consideration;Strengthen the supervision and punishment from the perspective of aggravating the amount punishment of incomplete evaluation report and strictly controlling the evaluation institutions that issue distorted evaluation report;Innovating evaluation methods from the perspective of flexible combination of multiple evaluation methods;From the perspective of paying merger consideration in batches,we can improve the payment method of merger consideration in order to avoid the risk of goodwill impairment.