Hi,
If there is goodwill on acquisition of 60% subsidiary, how do i test the goodwill for impairment based on VIU?
Should = ( carrying amount of goodwill + net assets of subsidiary) - recoverable amount ?
Goodwill impairment testing
Re: Goodwill impairment testing
it can be a bit tricky, the exercise depends on how you measured the NCI:
https://ifrscommunity.com/knowledge-bas ... g-interest
fortunately IAS 36 deliberates a bit on this matter (see appendix C of IAS 36 and example 7)
eg.C4 of IAS 36
https://ifrscommunity.com/knowledge-bas ... g-interest
fortunately IAS 36 deliberates a bit on this matter (see appendix C of IAS 36 and example 7)
eg.C4 of IAS 36
Allocating an impairment loss followsIf an entity measures non-controlling interests as its proportionate interest in the net identifiable assets of a subsidiary at the acquisition date, rather than at fair value, goodwill attributable to non-controlling interests is included in the recoverable amount of the related cash-generating unit but is not recognised in the parent’s consolidated financial statements. As a consequence, an entity shall gross up the carrying amount of goodwill allocated to the unit to include the goodwill attributable to the non-controlling interest. This adjusted carrying amount is then compared with the recoverable amount of the unit to determine whether the cash-generating unit is impaired