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Thanks all for your inputs

Ok then, the final thing to check is whether the entity would identify any operating segments under IFRS 8 (IAS 36.80(b)). This applies irrespective of whether the entity is in the scope of IFRS 8, so this may be a new exercise for you. https://ifrscommunity.com/knowledge-base/ifrs-8-operating-segm...

You're either saying that goodwill needs to be tested at the level of multiple CGUs, or that it's impaired... We are testing for impairment of goodwill on an annual basis (as required by the relevant standard), but the question is whether we should first allocate the goodwill to all CGUs and then d...

Marek Muc wrote: ↑18 Dec 2023, 17:04 Do all CGUs benefit from the business combination?

Yes, all CGUs get benefits of synergies, adoption of better business efficiencies etc

That's the point I am trying to use to support non-allocation of goodwill.

We paid more than the fair value of the assets because of future benefits like synergies, which are more identified at the entity level than with any lower level CGUs

We acquired a business and recorded goodwill being the difference between the purchase price and the fair value of the business + identified intangible assets. Management does not monitor this goodwill except at the entity level. In such a case, is it necessary to allocate goodwill to each CGU (or s...

Through acquisition of a business

Hi We have a case where goodwill arose out of a business combination but management does not monitor goodwill as any specific CGU level. In such a case, we feel it is not necessary to allocate goodwill to any CGU for impairment testing purpose (IAS 36 para 80(a). Impairment test will be carried out ...

Thanks

Thanks JRSB and Marek.

Will there be a chance of the existing estimate be treated as an erroneous estimate and the impact of the revised estimated useful life asked to be implemented with retrospective effect ( i.e an error) that requires restatement?

Hi friends In case a company continues to use fully depreciated assets on a regular basis (say, about 20% of the total cost of assets in that asset class have been fully depreciated but still being used), will it trigger a case for re-looking at the estimated useful life of the asset class? It defin...

I agree. Thanks

So, the 20% threshold is applicable only for ownership (voting power) and not for the seats in the Board - even one director is enough to establish significant influence, is it right?

Dear all A question on significant influence as explained in IAS 28: If an entity has the power to appoint say 1 director out of a total of 6 directors in the Board, keeping all other things apart, will it mean that the entity will not have significant influence as the it can hold only 1/6 i.e. 16% ...

Thanks Leo. But in this case the impairment is not impacting the consolidated financials. Is it because the impairment should be recorded in the books of the subsidiary on its specific assets?

Dear all We have a case where a holding company has run an impairment test of its subsidiary and found that the present value of expected cashflows from the subsidiary is lower than the carrying value of the investment in subsidiary in its (holdco) books. Can the holding company take an impairment c...

Hi friends Can the holding company (promoters) of an investee entity (subsidiary) from which they make a partial divestment (without loss of control), record the listing expenses in their books? In this case, the two companies entered into an agreement to this effect and the prospectus issued for li...

Hi Marek

To answer to your question, there are only a few players and licenses are not issued frequently. So it would be difficult to get a replacement cost.

True. In practice MEEM calculations may produce inflated intangible values because the contributory asset charges may leave out some resources on of which entities charge a "profit margin", though indirectly (examples: G&A costs, marketing costs). Thus we may end up assigning the entir...

Thanks.

Let me try this.

I have used a similar approach for the "regulatory approvals" related to the pharma industry which develops extensive product data called "product files". The costs related to such "files" are capitalized as intangible assets and amortized. In this case, the company tha...

Thanks for the inputs. The license is not replaceable as this is issued by the regulatory authority. We used the MIEM method but found that in such a case the entire residual cash flow after deducting the cashflows generated by other resources to be a huge amount. If we use this as the value of the ...

Good to note and thanks for your revert.

Dear all Would like to check with you if, as part of PPA exercise, you had come across valuation of a business license of a special type - one without which the entity is not permitted to carry on its activities (a regulatory requirement). No separate cashflows are identifiable with this. How did yo...

Hi Leo To clarify: I had not given yearly JVs. The calculations are only the total interest income or expense attributable to the payments made each year. Sample JVs have been given in the second part of the file. If in your calculations, you assume payments made at the beginning of each year (which...

Hi

Attached is the pdf file showing the calculations. Unfortunately I could not load the file in excel format. You will also see a second section which shows sample entries.
By the way, the standard says that a single discount rate should be used throughout the period.
Hope this helps.

Hi Leo 1. If all payments are made in advance and revenue recognition comes later, it could lead to a presumption of existence of financing component. But if “cash price” is not readily available and management could prove that “financing” was not part of the “price quote calculations”, then the aud...

Hi 1. It does appear that there is a significant financing component as the customer is making an advance payment as well as gets the benefit of periodic payment over 8 years. 2. Measurement of the financing component may be on the basis of "cash price" of the property or if the contract s...

Hi Para 33 seems to indicate that the fair value of acquiree's equity interest may be considered if it is more reliably measurable than the acquirer's equity interest. Since in this case, A's (acquirer) equity interest can be reliably measured (being quoted in the open market) and C's (acquiree) equ...

Hi Though for the first year (2021) you will be paying tax on a higher lease income ($8.56mn vis a vis $5mn), you will continue to pay tax on a lower amount in the subsequent 2 years ($8.56mn vis a vis actual receipt of $10.5mn). Thus what you lose is the time value of money paid upfront by way of t...