Page 277 - SBR Integrated Workbook STUDENT S18-J19

Group accounting – Basic groups

Example 9

Goodwill impairment

Parent owns 60% of the ordinary shares of Sub.

Goodwill arising on the acquisition of Sub was $6 million. No impairments
have been recorded against goodwill to-date. At the reporting date, the
carrying amount of Sub’s net assets (excluding goodwill) in the consolidated
statements was $12 million.

The recoverable amount of Sub at the reporting date was calculated as $15
million.

How will the impairment review impact the consolidated financial
statements if the non-controlling interest at the acquisition date was
valued at:

 fair value, or

 its proportionate share of Sub’s net assets?

271