We herein report an experimental study to explore the effects of impact inertia, film thickness and viscosity on the dynamics of shape deformation of a drop impacting a liquid film. We have identified that the spreading dynamics shows a weak dependence on impact inertia, but strongly depends on the film thickness. For a thick film, the liquid surface deforms and absorbs part of the impact energy, and hence inhibits spreading of the drop. For a thin film, the drop motion is restricted by the bottom solid substrate, promoting spreading. The periodicity of the capillary controlled shape oscillation, on the other hand, is found to be independent of impact inertia and film thickness. The damping of the shape oscillation shows strong dependence on the film thickness, in that the oscillation decays faster for smaller film thicknesses, due to the enhanced viscous loss.