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Dear Tutor
I don’t understand the answer explain about the goodwill. there is only an associate purchased in the current finacial year, but how the answer says ” it may be that no goodwill arose on the acquisition”? If I answer it, I will mention there is no impairement for goodwill and can cause overstatement of intangible assets. Have I missed out information on any exhibits?
Many thanks
I cannot find any reference to goodwill in the answer to the 2019 S/D19 Sample Q1 or your quote “it may be ….” in a published answer. Please clarify.
Thanks for your reply. It’s SPECIMEN 2019 paper, not SEP/DEC 2019. Dando&Co audit Adams Group. it’s the same question as 2014 June Q1.
Aha – I hadn’t realised that ACCA had relabelled the 2018 Specimen as 2019 – thank you for drawing my attention to that.
The answer says – my words in [CAPS]:
“The draft consolidated statement of financial position does not recognise [INCLUDE] goodwill, which is unusual for a Group with three subsidiaries. It may be that no goodwill arose on the acquisitions [PLURAL – referring to PAST acquisitions of the THREE SUBS], or that the goodwill has been fully written off by impairment. However, there is a risk of understatement of intangible assets at the Group level.”So what it’s observing is that there is no goodwill line in Exhibit 3 – which means:
– there was none (seems unlikely on three acquisitions); or
– its all been written off (possible as the group structure hasn’t changed for many years implies the subsidiaries have been around for a long time and goodwill could have been written off at some point); or
– there’s been a mistake in the consolidation – this can’t be ruled out so identified as RoMM.
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