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Hello
1:
Firstly , the question mentions “…….because there was no purchase price allocation available for certain business combinations in its opening IFRS statement of financial position.”
Since it was not specified, should i assume or not assume that there was a price allocation for the fishing rights?2:
The answer mentions “As a result the goodwill presented in the first financial statements under IFRS, insofar as it did not require a write-down due to impairment at the date of transition to IFRS, will be the same as its net carrying amount at the date of transition.”If there was no price allocated to the fishing rights (as mentioned in the question) then this value would be zero. How then can a zero value be impaired?
Ques:
https://www.chinaacc.com/upload/html/2013/07/01/lixingcun01caa274aaeb4e208b28bdd8f0fe0805.pdfAns:
https://www.accanet.com/content/dam/acca/global/PDF-students/2012/p2mys_2011_jun_a.pdfHi,
1. It would be very unlikely that in a business combination there wouldn’t be an available price.
2. But there would be an available price, so there would be goodwill and there could be an impairment.
Don’t delve too deep into this question as it takes IFRS 1 to crazy extremes that you wouldn’t likely see again.
Thanks
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