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Dear Tutor
Kindly advise why in some questions Notional Goodwill is calculated when testing for Impairment losses and in some its not the case. Are there any specific cases when this must be done or not? example is question Ejoy (ACR,6/06, amended in the BPP Revision Kit)
Hi,
The notional goodwill is calculated when testing for impairment if the goodwill is measured using the partial goodwill. To calculate the impairment in the subsidiary it is necessary to gross up the partial goodwill to get the full value of the subsidiary.
Thanks
Thankyou very much for your reply now I understand.
Would also kindly tell me what is observable inputs and unobservable inputs in Fair Value – Valuation technique hierarchy. I do self study and so I turn to get stuck with certain terms. I saw a setence that said maximise on observable inputs and minimise on unobservable inputs) but then I don’t know what they mean
Hi,
Observable inputs are when there exists a fair value for an identical or similar asset or liability.
Unobservable inputs are when there isn’t a directly available fair value and we have to calculate a fair value using indirect factors, such as using discounted cash flows to calculate the fair value.
Could you please help me in future by starting any queries on a different subject matter to your original post in a different thread? It just means that the answers to each question are clearly distinguishable for other students on the forum.
Thanks
Thank you much well understood now and appreciated and will do as advised in the future about different subject matters.
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