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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Goodwill and revenue
May i ask why goodwill is assumed to be impaired when revenue has decreased from the last year ?
Thank you
I’m not aware that it is an “assumption”. However, future earnings / revenue stream will usually be a significant factor in determining the purchase price of a business and hence the consideration paid for goodwill (excess over tangible net assets). So revenue less than forecast would most likely be an indicator of impairment.
