Question
Buster Ltd had purchased goodwill to the value of $100 000 recorded in its consolidated financial statements. The goodwill has been determined to have an
Buster Ltd had purchased goodwill to the value of $100 000 recorded in its consolidated financial statements. The goodwill has been determined to have an indefinite useful life. However, one year later Buster Ltd's cash-generating units has been determined to have incurred an impairment loss of $13 000. What is the appropriate action for Buster limited to comply with AASB 138Intangible Assetsand AASB 136Impairment of Assets?
Write-off goodwill in its entirety as goodwill no longer exists.
Recognise impairment loss of $13 000 and credit goodwill.
Amortise goodwill for 20 years using straight-line method.
Recognise impairment loss of $13 000 and credit equity.
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