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Non Current Assets – Opentution Notes – Page 63
Dear Sir / Madam,
My understanding is purchased goodwill belongs to entire organization – which may be comprised of
number of Cash Generating Units. As such Goodwill of 50 Million shown under Head Office Column belongs to
Department 1 + Department 2 + Head Office.
Now when impairment takes place first thing to be knocked out would be Goodwill and if any further impairment
to be allocated on Pro-rata basis to all units.
Now impairment of 50 Million has taken place so logically Goodwill of 50 Million would get knocked off and final table would like as under
Department 1 Department 2 Head Office Total
120 Million 140 Million 70 Million 330 MillionKindly correct me, If I am wrong.
Deep
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Hi Deep
you misunderstood the situation. There was an impairment of 50, dep 2 is impaired by 30, As 170 was its CV and 140 RA, Dep 1 did not impair.100 was its cv while 120 its RA. So the remaining 20 of impairment would be impaired goodwill after deducting any specific impaired asset.
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