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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For goodwill impairment testing, what is the testing level under U.S. GAAP and IFRS?
Under U.S. GAAP, goodwill is tested for impairment at the “reporting unit” level, while under IFRS, the testing is performed at the cash-generating unit (CGU).
What is the difference between the partial goodwill method and the full goodwill method under IFRS?
The main difference is how goodwill is treated. Under the full goodwill method, even if the parent doesn’t own 100% of the entity, goodwill is treated as 100% owned by the parent (similar to the 100% unicorn below). However, under the partial goodwill method, the parent can only record goodwill for the percentage they own […]
Can goodwill be internally generated by a company?
Absolutely not. Goodwill can only be generated through an acquisition or purchase of assets from a 3rd party.