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CONSOLIDATIONS AFTER THE DATE OF ACQUISITION
Impairment of Goodwill
• This annual testing usually takes place at the reporting
date when the recoverable amount of the goodwill is
determined and compared to the carrying amount.
• In cases where the recoverable amount of the
goodwill is below the carrying amount, the goodwill is
impaired by the difference between the recoverable
amount and the carrying amount.
• This impairment loss is recorded in profit and loss as
part of “other expenses” (debited) and goodwill
(asset) is credited with the same amount.
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