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I have seen 2 different ways in which impairment has been allocated under proportionate nci.
Sir Mike,can u pls tell me is this the right way of doing it for a proportionate qs
1.Total impairment * Parents holding %
Or is this correct
Total impairment-nci share of goodwill under proportionate(imaginary portion)=remaining for parent?
I find that the way this working is set out in published answers is quite confusing.
If we add the notional goodwill attributed to the nci onto the calculated goodwill (which is all ours) and then add the value of the identifiable net assets (as adjusted for fair values, we then compare with the recoverable amount to give us an indication of impairment.
Now deduct the notional nci and that will leave the impairment attributable to the parent.
Now that’s the way they appear to set it out (reasonably consistently) in the printed solutions.
What I get confused about is “why add on the notional nci?’ Why not simply take the goodwill attributable to the parent, add on the parent’s percentage of the fair value of the identifiable assets, compare with the parent’s percentage of the recoverable amount and there’s the parent’s share of the impairment (if applicable)
OK?
Ok!
I totally agree with you. I mean I don’t like adding notional NCI neither!
If i do as you suggest on the exam, will I be wrong? (“simply take the goodwill attributable to the parent, add on the parent’s percentage of the fair value of the identifiable assets, compare with the parent’s percentage of the recoverable amount “)
Dear Mr Little,
Question 1/ Impaiment of Park
Hope you are well. i hve bought the book of Mr Graham Holt re IFRS and the BPP books. and in both books, the impairment allocated to the parent is the Impairment x % of the parent. i am a bit confused also by the answers given in the paper of June 2013.
thanks a lot.
Louisa
Hi Louisa
Is that a question? I believe that my answer to hasanali’s original post is in line with your own contribution.
If it isn’t coincidental with your thinking, then please post again. If we are in agreement, please do NOT post again – if you DO post, simply to say you agree, it means that my name is not the last in the thread and I have to open it to see if there’s another related question.
Thanks 🙂
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