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Hi,
I’m a bit confused on the calculation of the impairment for the proportionate goodwill between the June 2013 paper and the December 2011 paper.
The December 2011 seems easy and simple to understand. So after they got 61, they have simply deducted this of the goodwill and deducted it of the retained earning. Is this because the actual goodwill of 120 was higher than the impairment of 61?
In the June 2013 paper, the calculation seems completely different and I’m a bit confused here because after they got 300, they have done 133.30 – 80 = 53. 300 – 53 = 247, then they have deducted 80 (goodwill) which made it 167 and the 167 is split between 60% RE and 40% NCI. However this was not split on the December 2011 paper which I dont understand why.
I would appreciate if you can help me understand why its different.
Thanks
Hi,
The difference is that in the June 2013 paper the impairment reduced the goodwill to zero and the excess impairment had to be taken to PPE.
The 80 does not need to be split as it relates to the parent’s share but the impairment of the PPE has to be split between the parent and the NCI.
I would not even be considering this in the real exam, there are many more easier marks to pick up.
Thanks
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