Dear Sir,
In Q1 of Sep/Dec 2019, the answer said that when proportion method is applied, as only 19.6m goodwill is recognised within consolidate, the impairment attributable to the notional goodwill is not recognised.
But in the calculation table, the amount of impairment for notional goodwill of 4.9m still appears.
Please help me to explain.
Thank you.
Ask the Tutor ACCA SBR
Allocation of impairment loss for goodwill (proportion method)
3y ago#11. Gross up goodwill to 24.5.
2. Add to other net assets making a total of 130.5.
3. Compare to recoverable amount of 100, making a loss of 30.5.
4. allocate loss:
- 24.5 to goodwill
- balance to other non current assets
And watch my debrief again!
I understand your calculation and the calculation in examiner answer is the same.
But I only do not understand the explanation in examiner answer: “when proportion method is applied, as only 19.6m goodwill is recognised within consolidate, the impairment attributable to the notional goodwill is not recognised.”
3y ago#3Not sure either. :) The marks are given if you:
1. Do the calculation
2. Say in a simple sentence that the goodwill needs grossing up
See my recorded debriefs for examples of what to write.
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