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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Goodwill impairment
The following information related to the calculation of goodwill in acquisition of findler :”Goodwill of Findler Co of $1,020,000 had been impaired by 25% in the year ended 30 June 20X4. Since the sales proceeds were above the original cost, it was decided to reverse the impairment in the current year which has been credited to administrative expenses in the draft consolidated statement of profit or loss for the Articat group.”
I want to ask why in the model answer the goodwill impairment is calculated at : 1020k*25% =255k at the year end 30 June 20X5, as the problem only referred to goodwill impaired by 25% in the year ended 30 June 20X4, no more information about goodwill until 30 June 20X5?
Not allowed to reverse impairment of goodwill.
If the accountant has posted this reversal, we will need to debit admin expenses by 255 – error correction.