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An entity tests goodwill annually. The most recent detailed RA calculation for a CGU exceeded its CA by a substantial margin, CGU composition is unchanged, and likelihood of current RA falling below CA is remote. Per Ind AS 36 paragraph 99, the entity may:
ACarry forward the prior-period RA calculation and use it for the current period's impairment test — provided all three criteria (stable composition + substantial historical headroom + remote likelihood of current impairment) are met
BApply a discounted version of the prior calculation
CDefer goodwill testing for up to three years
DSkip the annual test entirely
Answer & Solution
Correct answer: A. Carry forward the prior-period RA calculation and use it for the current period's impairment test — provided all three criteria (stable composition + substantial historical headroom + remote likelihood of current impairment) are met
Same relief as paragraph 24 for indefinite-life intangibles: prior detailed RA may be carried forward if the three cumulative conditions are met. The disclosures must then refer to the carried-forward calculation. This is a practical expedient — annual testing isn't 'skipped', just satisfied via the prior calculation.
Related questions
Identify the statement about CGU disclosure under Ind AS 36 that is INCORRECT.When an impairment loss recognised in a prior period for a CGU is REVERSED:When an impairment loss is allocated within a CGU, the order of allocation under Ind AS 36Multiple CGUs share the SAME key assumption (e.g. growth in a common end market) and the AAn entity's CGU recoverable amount is based on VIU. The discount rate disclosure required An entity uses a SENSITIVITY disclosure when a reasonably possible change in a key assumptWhen projecting cash flows beyond the period covered by management's most recent budgets/fWhen an entity discloses a CGU to which significant goodwill is allocated and recoverable