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Consider the impact of the auditor’s assessment of going concern on the impairment review, e.g. the impact on the assumption relating to growth rates which have been used as part of the impairment calculations.
maam as far as the above point is concerned, is it trying to convey that lets say, the entity has significant risks with respect to its going concern status, then the growth rates will be low of income and possibly high of expenses. in that case the value in use calculation for calculating goodwill’s recoverable amount, will also use similar growth rates?
It’s illustrating that in AAA as opposed to AA there is a “bigger picture” and things shouldn’t be looked at in isolation – there will often be opportunities to see a linkage to something else.
In this question – and DO state it so I don’t have to find it (!) – the main issue concerned the impairment of goodwill. The point is just a more specific point/variation on the first point – are the assumptions used in any value-in-use calculations consistent with the assessment of the going concern basis? If no material uncertainty – then no issue. But if there is material uncertainty does that have implications for growth? And, if so, has that been reflected in the impairment testing?
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