A Study on the Causes of Goodwill Impairment in the Mergers and Acquisitions of Listed Companies: Taking Xunyou Technology as an Example

Purpose - The increase of goodwill impairment events in the process of the mergers and acquisitions of network enterprises has caused people to think about the risk of goodwill impairment. Therefore, this paper focuses on the study of the risk factors affecting goodwill impairment, with a focus on the economic consequences of goodwill impairment, in order to provide reference for listed companies to prevent goodwill impairment. Design/Methodology/Approach - This paper analyzes the goodwill impairment event of XunYou Technology’s merger and acquisition of Lion’s Roar. The method is based on a case study combined with the literature research method, along with the comparative analysis method, on the basis of the theory of the full summary of the causes of merger and acquisition goodwill impairment research. Findings - This paper explains the process, motivation, goodwill, and performance commitment of Xunyou Technology's merger and acquisition, and deeply analyzes the reasons for the impairment of the goodwill of Xunyou Technology's merger and acquisition, and finds that high valuation leads to a high premium merger, and the performance commitment of enterprises is not up to the standard. The important reason for the impairment of goodwill is that the synergy effect after the merger is not fully realized, and the management has the operating motive of earning. Research Implications - This paper analyzes the M&A goodwill impairment case of Xunyou Technology, which can enrich the research on M&A and goodwill, enlighten enterprises on the prevention and management of risks, and provide case references for follow-up research and the formulation of relevant policies.