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Dear Sir,
When NCI is valued using proportionate method, the Goodwill impairment is calculated using notional good will and the resultant impairment is only taken to the % of holding of parent. But what about the remaining impairment? Is it allocated against other assets or is it just ignored. Because in all problems except one we always ignored it. For example if 100 was impairment and parent held 80% we just took 80 as impairment all allocated to equity holders of parent. What do we do to the remaining 20?
Hi,
The remaining impairment is effectively ignored as it is just a notional figure that we have calculated to get the impairment. Using the proportionate method, there is no NCI goodwill to be able to allocate the impairment against, so it is just ignored.
You’ll have to point me in the direction of where you’ve seen the different treatments.
Thanks
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