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Goodwill Impairment Under IFRS

   

Added on  2020-05-11

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Running head: FINANCIAL ACCOUNTINGFinancial AccountingName of the Student:Name of the University:Author’s Note:Course ID:
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1FINANCIAL ACCOUNTINGTable of ContentsPart 1: Memo...................................................................................................................................2Part 2: Short letter............................................................................................................................3References:......................................................................................................................................6
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2FINANCIAL ACCOUNTINGPart 1: MemoTo: staff@mjcpartners.netFrom: peter@mjcpartners.auCc: directors@mjcpartners.netDate: 13th October 2017Subject: Issues of the IFRS Goodwill and Impairment ProjectAccording to IAS 36, it is necessary to test goodwill at least yearly for impairment at thelowest level monitored on the part of the management. It could not be more in contrast to theoperating segment belonging to under IFRS 8 “Operating Segments”. If it is based on individualcash-generating unit (CGU), goodwill impairment needs to be carried out on individual basis(Baboukardos and Rimmel 2014). However, when goodwill is impaired based on a bigger groupof CGU, the reflection needs to be made through the impairment testing of goodwill. In case, the carrying amount of the CGU group including goodwill is lower than therecoverable amount, there would be no recognition of impairment. However, if the recoverableamount is lower than the carrying value of the CGU and allocated goodwill, it is impaired. Thisparticular charge of impairment is allocated initially to the balance of goodwill for minimising itto zero and after that, pro rata to the carrying amount of other assets within CGU group (Glaum,Landsman and Wyrwa 2015).The testing of goodwill is carried out for impairment when there is an impaired indicatoror at the time, there is an indicator that the CGU to which it is distributed is impaired. At the time
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