- This topic has 1 reply, 2 voices, and was last updated 11 months ago by
P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › IMPAIRMENT OF ASSETS
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?
Hi,
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