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Ind As 36, Goodwill allocation
Accountancy
Plz could anyone explain this line in detail "The goodwill allocated to A cannot be identified or associated with an asset group at lower level than A, arbitrarily".
Answers (5)
Best Answer
An entity sells for Rs 100 an operation that was part of a cash generating unit to which goodwill has been allocated. The goodwill allocated to the unit cannot be identified or associated with an asset group at a level lower than that unit, except arbitrarily. The recoverable amount of the portion of the cash-generating unit retained is Rs 300. Because the goodwill allocated to the cash-generating unit cannot be non-arbitrarily identified or associated with an asset group at a level lower than that unit, the goodwill associated with the operation disposed of is measured on the basis of the relative values of the operation disposed of and the portion of the unit retained. Therefore, 25 per cent of the goodwill allocated to the cash-generating unit is included in the carrying amount of the operation that is sold.
shalu Muthukumar
An entity sells for Rs 100 an operation that was part of a cash generating unit to which goodwill has been allocated. The goodwill allocated to the unit cannot be identified or associated with an asset group at a level lower than that unit, except arbitrarily. The recoverable amount of the portion of the cash-generating unit retained is Rs 300. Because the goodwill allocated to the cash-generating unit cannot be non-arbitrarily identified or associated with an asset group at a level lower than that unit, the goodwill associated with the operation disposed of is measured on the basis of the relative values of the operation disposed of and the portion of the unit retained. Therefore, 25 per cent of the goodwill allocated to the cash-generating unit is included in the carrying amount of the operation that is sold.
Thanks a lot, can i know what does it meant by "associated with an asset group at a level lower than that unit"
Thread Starter
Chandu vadlaThanks a lot, can i know what does it meant by "associated with an asset group at a level lower than that unit"
An asset group is the unit of account for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.
