ACCA FR · Chapter 12 · Question 11 of 13
Where NCI is measured at its proportionate share of the subsidiary's identifiable net assets, how is an impairment of goodwill dealt with in the consolidated SFP?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It is charged in full against group retained earnings, with no effect on NCI
Explanation
Under the proportionate share method, goodwill in the consolidated SFP is the parent's goodwill only. Any impairment therefore belongs entirely to the parent's shareholders and is deducted from group retained earnings. Under the fair value method, the impairment is shared between the group and NCI.
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