Impairment… here we go again! In this episode, I revisit IAS 36, but this time we focus on one of the areas that students often find difficult: Goodwill Impairment. I walk through the key principles, explain why goodwill must be tested through a cash-generating unit (CGU), and tackle one of the biggest exam complications: the treatment of non-controlling interests (NCI).

You’ll learn how goodwill impairment is tested in SBR questions, when impairment losses affect the parent and NCI, and why the measurement of NCI changes the calculation completely. Most importantly, I work through practical examples and journal entries so you can see exactly how the examiner expects you to approach this topic and pick up the marks in the exam.

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Chapters:

(00:00) Introduction to goodwill impairment

(01:02) Recap of IAS 36 impairment basics

(02:30) Annual impairment review vs annual impairment loss

(03:12) Goodwill impairment and the P&L treatment

(04:41) Why goodwill is tested within a CGU

(06:23) Goodwill, CGUs and exam application

(06:54) NCI measurement and its impact on goodwill

(08:54) Example 1: Full goodwill impairment (Bowie)

(11:52) Accounting treatment and journal entries for full goodwill

(12:52) Example 2: Partial goodwill impairment (Ziggy)

(16:11) Journal entries and exam technique tips

(17:31) Final exam advice and close