Effectiveness of investment in business acquisition: Results of disclosures 2021–2022

Abstract

Aim. To perform an assessment of the performance of investments in business acquisitions over the years to 2021 by analyzing the impairments recognized in 2021 and 2022.Objectives. To examine the possible approaches to analyze the performance of mergers and acquisitions; to elaborate on one of the approaches in the aspect of investigating the impairment of goodwill previously recognized as a result of company acquisitions; to analyze the indicators of available financial statements of companies for 2021 and 2022.Methods. The study is based on the analysis of consolidated financial statements of Russian companies and sample data on foreign companies. We considered individual transactions on foreign companies’ exit from the Russian market and assessed the effect of their influence on the financial statements of foreign companies.Results. The authors have carried out a post facto evaluation of the indicators of the largest Russian companies in the sample, assessed the possibilities of goodwill recovery as a result of M&A transactions. As a result of the analysis the conclusion is formed that the situation in the considered sector of economy remains stable. Meanwhile, foreign investors who have left the Russian market recognize significant impairment of investments in their financial statements.Conclusions. The prospect for further research is to conduct a more extensive analysis based on a larger sample of companies. In 2023, some companies that preferred not to publish their 2022 financial statements have started to disclose their financial results again. This provides an opportunity to continue the research begun in the paper on the results obtained and to make further refinements.