Thắc mắc goodwill impairment

[LyManh]

Goodwill:
Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the assets acquired, less liabilities assumed, based on their fair values. Goodwill is allocated as of the date of the business combination to the TSE Inc. reporting units that are expected to benefit from the synergies of the business combination.
Goodwill is not amortized and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the value of goodwill is determined in a business combination described in the preceding paragraph, using the fair value of the reporting unit as if it was the purchase price. When the carrying amount of reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the statement of income before extraordinary items and discontinued operations.

Hic, ai đọc xong, nếu đc làm ơn túm lại cho mình hiểu, cách hạch toán (nếu có) càng tốt, đang học P6 CAT mà gà cái khoản này wá, với lại mấy cái ratio analysis nữa. Thx in advance!

 

[XIANGQIANG]

Hic, CAT mà cũng khó vậy ý hả? Thực ra, để hiểu rõ cái này thì khá là phức tạp, nhưng ngắn gọn về nguyên tắc thì như sau:

1. When Company A acquires Company B, company A have to evaluate the goodwill araised from the business combination and recognise in the consolidation report of Co.A

Goodwill (GW) = Purchase price - Fair value of net assets of Co. B at acquisition date.

- If Goodwill is negative (<0) --> recognise in immedidately in P&L
- If GW > 0 --> recognise as intangible asset in Consolidation report of Co.A

2. Under IAS 36, GW is not amortised, but is tested for impairment.

>>> What are principles of impairment ? There are 3 concepts we need to understand:
+ Carrying amount (CA): Book value of assets
+ Recoverable amount (RA): higher of value in use and net realisable value
--> For any asset,
+ if CA < RA --> asset is not impaired
+ if CA > RA --> Asset is impaired --> need to recognise impairment loss

>>> Impairment test for GW
In short:
1. Identify reporting unit (IAS 36: "cash-generating units") which are expected to benefit from the synergies of business combination.
2. Allocate GW into each reporing unit ("cash-generating unit")
3. Test the impairment of each cash - generating unit under the principles above.
4. If there's impairment loss (when RA < CV --> impairment loss = CV - RA) --> recognise impaired GW in P&L.
(Note: impairment loss will be allocated to reduce CV of GW first and then element of cash generating unit)


You may need to read IFRS 3 for GW calculation and IAS 36 to understand what is
- reporting unit --> cash generating unit
- how to indentify cash generating unit
....


Hope this helps.

 

[LyManh]

Thx bro, mấy hôm nay bận ôn thi cái món này (p6), wên ko lên 4rum lun.
Phần 1 với 2 thì hỉu đc, phần cuối thì . Khai thông đc chút đỉnh rùi, đa tạ hé.