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What is the formula for testing goodwill impairment under IFRS?

Under IFRS for assessing whether goodwill is impaired, the test is performed on the cash-generating unit. The company would compare the fair-market-value of the reporting unit to the net-book-value of the reporting unit.

If FMV exceeds the NBV, then there is no impairment. However, if FMV is less than the NBV, then goodwill is impaired.


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