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Hi, I am working on one of the questions from BPP revision kit, and when the parent company has 70% control of the subsidiary company and it says that goodwill on acuisition is impaired by 50%.
What confuses me is that when it comes to calcuate the group retained earnings, the final figure was adjusted by removing 50% of the lose on goodwill. Could I please ask why? this is referring to P69, question 230 on BPP revision kit.Hi,
If there is an impairment of goodwill under the fair value method then the impairment is shared between the NCI and the parent (group retained earnings). So, in the question that you mention the loss on goodwill would see 70% go through retained earnings and 30% through the NCI, provided that the goodwill is measured using the fair value method.
Thanks
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