When allocating impairment to CGUs, why is goodwill impaired too?
Ask the Tutor ACCA FR
Impairment- Goodwill
Hi,
The goodwill balance in the accounts is the excess that a business has paid to acquire another business, so it isn't actually representing anything specifically identifiable within the accounts. If the impairment is showing a reduction in the value of the assets then it would only seem fair to allocate this against the goodwill as it is now effectively worthless, and wasn't really anything much in the first place.
Thanks
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