- This topic has 1 reply, 2 voices, and was last updated 9 months ago by .
- You must be logged in to reply to this topic.
PQ Awards Nominations
Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
As per IAS 36, where an asset cannot be assessed for its recoverable amount individually it can be assessed as part of a cash generating unit. The impairment is written off against the assets by allocating first against goodwill then against other assets on a prorated basis.
However, goodwill only appears on group financial statements rather than on individual subsidiaries’ books. Does it mean that impairment is only required for group accounts? Or, impairment is first done on subsidiary level then again on group level?
There could be 3 ‘levels’:
1. Parent must consider CA of it’s ‘investment in subsidiary’.
2. Subsidiary must consider CA of it’s assets (which will not include goodwill).
3. Group accounts must consider CA of it’s subsidiary (Net assets plus goodwill).