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Hi Mike,
I am just curious as to why in the example stated above, no impairment was done in the solution to the example. The question clearly states that the SoFP is for 2 years after acquisition.
The question tells you that “Goodwill has not been impaired since acquisition”
Now, from your question, it. Seems that you think that goodwill impairment is like depreciation and should be charged each and every year.
That is not so! Each year the directors are required to conduct an “annual impairment review” and if, as a result of that review, they reach the opinion that goodwill is impaired since last year, then they impair it.
Equally, if they conclude that goodwill is not impaired since last year, then they won’t impair it this year – even though it may have been impaired for each of the last “n” years
Does that clear up some confusion?
Thank you for your response. It is crystal clear now. I didn’t pay attention to the note below the question. I hope i wont do the same in the exam! 🙂
Thanks alot!
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