Home › CA Final › financialreporting › Ind AS 36 — Impairment Loss Recognition, CGU Identification, Goodwill Allocation to CGUs, Disposal within CGU › An entity reorganises its reporting structure: C…
An entity reorganises its reporting structure: CGU A's goodwill is being redistributed across new CGUs B, C, D. Reallocation methodology:
ADefer reallocation indefinitely
BRecognise full goodwill impairment on reorganisation
CUse a RELATIVE VALUE approach (similar to disposal-within-CGU) based on the relative values of the three portions of A before they are integrated with B, C, D — unless another method better reflects the goodwill
DAllocate all goodwill to CGU B alone
Answer & Solution
Correct answer: C. Use a RELATIVE VALUE approach (similar to disposal-within-CGU) based on the relative values of the three portions of A before they are integrated with B, C, D — unless another method better reflects the goodwill
Same relative-value method as for partial disposals applies to reorganisation-driven reallocation. Goodwill follows the relative value of the slices going into each new CGU. Other methods may be used only with demonstration of superior fit.
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