Goodwill – March 2016 Examiner Report comment

This is a very rare visitor to F7 and it’s not covered in the course notes (nor lectures)

Where nci is valued on a proportionate basis, no goodwill is attributable to them when we calculate the goodwill figure on acquisition in working W2

When there is an impairment of goodwill, however, we must pretend that there is some notional goodwill attributable to the nci

Then check to see if there in fact is any impairment necessary and, if there is, that impairment is divided between the parent and (notionally!) the nci

But because the nci don’t have any goodwill in the valuation of their investment, we clearly cannot deduct this notional share from the nci

So only the parent’s percentage of the impairment is expensed each year as appropriate

It’s awkward and it’s very infrequent so I wouldn’t get excited about it. Clearly the approved providers don’t cover the issue in any depth either if I interpret the examiner’s comments correctly

“Answers were either non-existent or clearly had no real understanding of either method or the differences between them”

OK?