I wonder how we decide by how much the goodwill should impair,
Is it like other asset can apply IAS 36?
The amount of goodwill impairment would be the difference between recognized amount and the fair value of goodwill.
The difficulty would be in estimating the fair value of goodwill. The fair value of the goodwill could be estimated by calculating how much the company would be able to sell the unit (or subsidiary), and then identifying the excess amount over the actual net assets. The excess amount would be the current fair value of goodwill.
Recognized goodwill in relation to subsidiary $2m
Current net assets of subsidiary $10m
Estimated sale price of subsidiary $11m
Fair value of goodwill (11-10) $1m
Amount of goodwill impairment (2-1) $1m
Hope this helps.
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