J19 Q B (iii)

B)iii) An explanation of your calculation of goodwill and the treatment of exchange differences on goodwill in the consolidated financial statements. You do not need to discuss how the disposal will affect the exchange differences.

Sir in the above Qs, as far as treatment of exchange differences is required, we are expected to write the following answer na:

“Goodwill is initially translated at the Acquisition date exchange rate and so would initially be recognized at $84 million. The impairment loss of $15 million will be expensed in consolidated profit or loss. Goodwill will be retranslated using the closing rate of exchange at each year end. Exchange gain should be recognized in OCI and accumulated under translation reserve. Since non-controlling interest is measured at fair value, both the impairment and the exchange gain would be apportioned 80%/20% between the shareholders of Carbise and NCI respectively”