Notional Goodwill

Hi @Sajidm, usually when you calculate G/W @ acq. there are 2 choice i.e FV or Net Proportionate Method, When we calculate G/W @ acq. based on the latter i.e Net Propotionate then we are calculating only our share of G/W which will be reported on the balance sheet & any imp. will not effect NCI working.

We gross up the g/w when checking for imp. because we have to take the whole value of the business i.e N.A & G.W , & since the G/w we report is only our share we then gross it up by whatever our share is / 100 ex: if 70% holding then 70/100. Then we check for imp. with the full value including N.A and then any excess over the Recoverable value we deduct that from G/W working as imp. but be careful we only take our share of the imp. ex: 100 imp. then only 70% of that amount i.e $70 as imp. deduct from G/W working.

Also be very careful when checking for impairment if the amount exceeds the the G/W value then it’s impairment of the Subsidiary as a CGU & we’ll have to deduct G/W & Net assets of the subsidiary anyways this is a complex example. Hope you understood