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Hi,
Could you please explain as to why we are deducting the Goodwill impairment amount of $78.00 from the PBT and also, could you please expain the goodwill calculation as well. They’ve given the carrying amount of goodwill and net assets of the sub..
Thanks a tonne!
Hi
According to my copy of the printed solution, the 78 goodwill impairment has been ADDED to pbt – it’s a non cash item – effectively the same as depreciation
As for the calculation of the 78 impairment, that is shown in Kaplan’s working W4. You can arrive at the same figure by considering just Ashanti rather than Ashanti AND the nci
Ashanti share of net assets is 60% x 240 = 144. Add to that the Ashanti goodwill in Broiler of 90 and arrive at 234.
Now compare that with the Ashanti share of the Broiler recoverable amount ie 60% x 260 = 156234 – 156 = 78 = the value of the impairment
OK?
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