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Hello sir,
The above question on page 254 Dec.2015 f7 note refers. In the solution on page 268-9 goodwill of associates was impaired by $21000. I need more clarification for the reason to do working 2 (goodwill) for associate.Hi
Working 5A Investment in Associate is calculated as “Cost + share of adjusted post acquisition profits – impairments”
There is therefore no need to calculate the “goodwill” in the associate – we just need the amount impaired
In fact, we no longer call the premium paid on acquisition on the associate “goodwill” – it’s simply “premium paid on acquisition”
If the example “Wear” still uses the expression “goodwill” then I’m sorry 🙁
The question might better read “The investment in the associate is impaired by $21,000”
Better?
Sorry
NB even if it were called goodwill, there’s still no need to calculate it – all we are faced with is the reduction of Investment in Associate by $21,000
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