When a cash generating units is impaired impairment is first allocated to purchased goodwill and then to assets on a pro rata baisis
WHY IS CGU IMPAIRMENT ALLOCATED TO PURCHASED GOODWILL?
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IMPAIRMENT OF ASSETS
5y ago#1Hi,
The purchased goodwill does not represent anything specific within the business. It is just the excess amount that has been paid to acquire a business, so if the value of a business has fallen then it makes sense to take it to the amount that does not represent anything tangibly.
Thanks
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