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An entity disposes of an OPERATION within a CGU to which goodwill was allocated. The goodwill cannot be non-arbitrarily identified with the operation. The goodwill attached to the disposed operation should be measured by:
ARELATIVE VALUE approach — based on the relative values of the operation disposed of and the portion of the CGU retained, unless the entity can demonstrate that another method better reflects the goodwill associated with the disposal
BAllocating the entire CGU's goodwill to the disposal
CAllocating goodwill at the original acquisition's FV ratio
DAllocating zero goodwill to the disposal
Answer & Solution
Correct answer: A. RELATIVE VALUE approach — based on the relative values of the operation disposed of and the portion of the CGU retained, unless the entity can demonstrate that another method better reflects the goodwill associated with the disposal
Ind AS 36 paragraph 86: relative-value method is the default when non-arbitrary identification fails. E.g. operation sold for ₹100 and retained portion's RA is ₹300 → 25% of CGU goodwill attaches to the disposal (since 100/(100+300) = 25%).
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