Parent Sub Associate with GOODWILL Impairment

@waynevanstraaten said:
When you have an Associate that has Impairment, how come you deduct the IMPAIRMENT(which is the balancing figure) in the Consolidation Reserves calc, too:

E.g. Consol Reserves
Parents’ own reserves now 9600
Sub growth (1710-1700)(80%) 8
Associate (700-650)(30%)15
Impairment -278

@#*Incidentally, the 278 is also the same balancing figure in calc Associate closing figure that goes into the top half of the CSFP
Associate(w)
acqn 500
growth (700-650)(30%) 15
closing before impairment = 515
IMPAIRMENT (bal figure) -278
closing after imp. 790×30%=237

Colleague – please make reference to the question(s) properly state the question number from which text (BPP or Kaplon). This is helpful and we can answer the question accordingly.

Share of associate – less than 50% but greater than 20% take consideration on profit made over the reporting period. If after the parent acquired the associate, the investment in associate impaired, then the amount is credited to the investment in associate and carried as an expense in the income statement for the year reviewing.

Companies always test – should for impairment on any investment – requirement for good accounting and reporting; the expense belong to the company who owns the investment and not share as per proportionate – they have it already!!!!

I’m not understanding your question clearly and will not make suggestions on what you wrote, but you can practice the basic – share profit and losses in the proportion; thereafter, ALL losses or gain on investments – as a results of impairment or revaluation belong to parent in their books.

Regards,

@waynevanstraaten said:
Halo Cardine,

The question comes from the notes in London of Business and Finance study notes, JUNE 2015.
I can scan and e-mail you the question, if you can forward me your e-mail address.

Lastly, thank you for responding to my question.

Wayne

Please do so – green_452@yahoo.com If you place in the subject line -Goodwill Impairment (Associate) ACCA P2; it’ll get attention