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Dear Sir,
Why don’t companies or their auditors calculate Goodwill in FOREIGN CURRENCY at the DOA and then yearly translate and see the Gain/Loss accordingly?If we have enough info @ EXAM to calculate Goodwill in foreign currency (i.e. Ex Rate @ DOA), is it OK to do so?
As per IAS 21
assets and liabilities for each balance sheet presented (including comparatives) are translated at the closing rate at the date of that balance sheet. This would include any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as part of the assets and liabilities of the foreign operation [IAS 21.47];
In other words, it is the requirement of the standard
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