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If goodwill in NCI is say £4000 and a question tells you that good will have been impaired by say £100000 and the NCI is 10% then what is goodwill impairment attributable to NCI / what are the entries for this?
Would it be £4000 because limited at goodwill the NCI actually had or £10000 and we now have negative goodwill or is this something that just wouldn’t happen?
Thanks
I’ve never seen this happen in an exam and my original thinking when I first wrote the notes was that the nice allocation would be restricted to the $4,000
However ….. on further reflection I understand that the mic would be charged with their full $10,000 share of the impairment.
That doesn’t create negative goodwill. It’s simply a way of allocating the impairment.
There is no situation, neither now nor in the future, where the nice is going to come knocking on the parent’s door and demanding their share of the subsidiary’s net assets
This entire exercise dissolves into a theoretical situation that isn’t going to occur in practice
My further thinking, therefore, is that the nci will be charged with their full $10,000
OK?
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