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Chapter 22

2.2 Goodwill

The proforma for calculating the current year gain or loss on the retranslation of
goodwill is as follows:

Dinars m Exchange rate $m

Opening GW X Opening rate X

Impairment (X) Average rate (X)

Foreign exchange
gain/(loss) Bal. fig. X/(X)

––––– –––––

Closing goodwill X Closing rate X

––––– –––––

It is important to pay attention to the method of goodwill calculation:

 If the full goodwill method has been used, gain and losses will need to be
apportioned between the group and the non-controlling interest based on their
respective shareholdings.

 If the proportionate goodwill method has been used, then all of the exchange
gain or loss on goodwill is attributable to the group.

Illustrations and further practice

Now try Illustration 3 from Chapter 22.

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