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There is a technology change and there is a fall in demand for a co’s products as a result, and an impairment test results in a loss of £2m consisting of goodwill of £1m, intangibles of £500k and PPE of £500k. Does this mean that in the individual FS for this co there is an impairment loss of £1m (for the intangibles and the PPE) and in the Group FS there is an impairment loss of £2m (for the goodwill,intangibles and PPE) ?
Thank you.If the impairment losses are recognised in the financial statements of the subsidiary, they will automatically be recognised in the consolidated financial statements (as the PPE and intangibles other that goodwill will have been written down). (If not written down in the individual company’s financial statements they should be written down on consolidation.)
As you indicate, the impairment of goodwill can only be recognised in the consolidated financial statements.Thanks. But if there has not been a writedown in the individual company’s FS are the individual company’s FS in breach of IFRS?
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