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Hie. I have watched the video lectures. I am still wondering what it means can you explain in layman terms please
when you say in proportionate goodwill we grossed up goodwill when an impairment review is performed so that it is comparable with the recoverable amount
Please help .
When we do an impairment review we need to compare like with like.
Net assets and recoverable amount are both of 100% of the business, but (proportionate) goodwill is only measured on the percentage of the business that the parent bought.
So, to match like with like, we gross the goodwill up.
If I was King I would never have invented the rule. I, like some others, believe that goodwill is just a balancing figure that needs to go somewhere.
🙂 But I’m not King….so I make the adjustment.
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