Question

How should the write down of goodwill be reported? What information should be disclosed related to goodwill?

Answer 1

Goodwill arises when entity pays more than Purchase Consideration over total fair value of assets and liabilities.

Fair value is the price a company could receive if it sold the asset or was paid to transfer a liability in normal market transaction at date of measurement.

Goodwill is carried as asset and evaluated for impairment at least once a year. If impairment is found company reduces the goodwill carrying value and recognizes impairment loss. Any material impairment are listed as line items above "income from continuing operations".

DISCLOSURES

• Gross amount and accumulated impairment loss at the beginning of the period
• Additional goodwill recognized during the period
• Adjustment resulting from subsequent recognition of deferred tax assets
• Impairment losses recognized during the year
• Net exchange differences
• Any other changes in carrying amount
• Gross amount and accumulated impairment loss at the end of period.
• Nature of goodwill
• Year of purchase

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