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Hi, i have a question here…. When you have a goodwill impairment in a scenario where you have only a Perent and Subsidiary, it is worked out liked this :
Prpoportionate Method :
Deduct from Grp RE
Deduct from Goodwill in Grp SFPFV of NCI Method :
Deduct from Goodwill in Grp SFP
Deduct from NCI calculation (NCI % x Impairment)
Deduct from Grp RE (% of P holding in S x Impairment)If you have a Goodwill Impairment in a scenario where you have a Parent, a Subsidiary and an Associate, how this is worked out?
Goodwill will not be touched now since Associate is not a part of the group, instead we will calculate ‘investment in Associates’ which will be shown under non current assets in CSFP.
Investment in associates: xxx
Cost of investment in A xx
+post aquisition profit xx
– impairment full $ (xx)And group RE will be adjusted with below 2 lines:
+Parent’s % share of post aquisition profit in A xx
-impairment in Associate full$ (xx)So this way an associate’s impairment is adjusted in NCA and in Reserves.
Thanks
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