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am i right in saying that we check for the impairment of goodwill on annual basis?
and at the year end we compare the FV of net assets that we acquired when we bought the sub.
if there is a fall in net assets value then we first match that against any goodwill which basically results in impairment and then we pro rata the rest with other assets if no more goodwill is left to be impaired?
please advise
thanks very much
“am i right in saying that we check for the impairment of goodwill on annual basis?”
It’s referred to as “the annual impairment review” and, yes, it’s done every year
“and at the year end we compare the FV of net assets that we acquired when we bought the sub.”
Yes to this as well
“If there is a fall in net assets value then we first match that against any goodwill which basically results in impairment and then we pro rata the rest with other assets if no more goodwill is left to be impaired?”
Now, is this question at the year end when we are comparing FV of net assets that we acquired when we bought the subsidiary? Or is it a different topic – IAS 36 Impairment?
hi mike
i am asking in relation to how we generally impair goodwill. if there is a question to audit goodwill then what are the indicators of impairment in goodwill? are they the same as covered in ias 36?
That’s a tricky one! It’s tricky because I have no practical experience of having to audit a goodwill figure nor even the client’s presumptions and assumptions about whether or not goodwill is impaired
I imagine that the indicators are similar (if not the same) as for IAS 36
But given that the goodwill that we are talking about is an amount that arises on the acquisition of subsidiaries, the I presume that a critical appraisal of the subsidiaries’ post-acquisition performance will give some useful insight into whether the acquisition was a sound investment
Will that do?
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