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Goodwill acquired in a business combination is allocated for impairment testing to:
AThe legal entity that acquired the business
BEach of the acquirer's CGUs (or groups of CGUs) that are expected to BENEFIT FROM THE SYNERGIES of the combination, regardless of whether the acquiree's assets/liabilities are also assigned there
CThe acquirer's smallest operating unit
DOnly the CGU containing the acquiree's principal asset
Answer & Solution
Correct answer: B. Each of the acquirer's CGUs (or groups of CGUs) that are expected to BENEFIT FROM THE SYNERGIES of the combination, regardless of whether the acquiree's assets/liabilities are also assigned there
Ind AS 36 paragraph 80: goodwill is allocated to CGUs/groups of CGUs expected to benefit from the BC synergies — synergies, not net-asset location, drive allocation.
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