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I am referring to the above topic. I am a lil confused about the associate calculation for impairment. I got the fair value adjustment and share of profit correctly. What i dont understand is why there is an impairment of $3.5 million for associate
My working is $11 + $8 (cost of investment)+2.5 (share of profit)=21.5
Suggested ans:
Cost (€8 million + €11 million) 19
Share of post acquisition profits (€10 million x 25%) 2·5
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21·5
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The investment in associate would then need to be impaired by 3·5 to reduce the investment to the recoverable amount of
18. The loss being taken to profit and loss.
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