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Hi,
I do not understand why goodwill is re-translated at every reporting date. Goodwill only exists in the parents FS, therefore once calculated and translated into the parents functional currency at acquisition date- it remains in that currency?
Thanks
It only exists in the GROUP accounts (not the parent accounts).
Until 20 years ago, retranslation was not required. But, sometime around the millenium, they changed the rule.
Logic – if you buy Disney based in the US, the goodwill is also in the US – that’s where Mickey Mouse lives – so we have to retranslate the goodwill.
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