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Dear tutor,
Please I would like a further explanation on this notional goodwill. When we are expected to gross up goodwill value, when we are not, the significance of it, and if at all such scenario is included in the examination question, what could be expected.
If you could simplify the whole idea,I would appreciate it.
Thank youIt should be applied when we’re facing an impairment and, at the same time, the nci has been valued on a proportional basis
We need to gross up the goodwill to allocate notionally some value to the nci
Then compare carrying value + full goodwill with recoverable amount.
Where recoverable amount is lower than cv + gw, then we need to impair the goodwill.
Calculate how much of that impairment is attributable to the parent and how much, notionally, is attributable to the nci
Deduct the parent’s allocation from the goodwill figure in csofp and add to cost of sales (or where directed) in csopol
Ignore the nci allocation
Ok?
Yes, yes!
Thank you KeyMaster. I’ll be back for further questions soon.
Thank you
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