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For intangible asset impairment, we can test using lower of carrying amount and recoverable amount (higher of VIU and FVLCTS).
How about goodwill? how method apply as well?
Hi,
When we test the goodwill for impairment we look at the CGU, which in this case would be the subsidiary.
We would therefore look at the carrying value of the subsidiary (net assets plus goodwill) and compare it to the recoverable amount. This would involve looking at the VIU and FVLCTS of the subsidiary.
In past exam question involving the calculations you’ve been given either the recoverable amount or the VIU and FVLCTS.
Thanks
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