Page 29 - Finac2 Test 1 Slides - 3. Intra-Group Transactions

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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