Question
When Shreve Co. acquired the shares of Bert Ltd, one of the assets in the statement of financial position of Bert Ltd was $30 000
When Shreve Co. acquired the shares of Bert Ltd, one of the assets in the statement of financial position of Bert Ltd was $30 000 goodwill, which had been recognized by Bert Ltd upon its acquisition of a business from Kouns Ltd. Having prepared the acquisition analysis as part of the process of preparing the consolidated financial statements for Kouns Ltd, the group accountant, Mary Miller, has asked for your opinion.
Question 2: How does the recording of goodwill by the subsidiary affect the accounting for the groups goodwill? Question 3: If, in subsequent years, goodwill is impaired, for example by $20 000, should the impairment loss be recognized in the records of Bert Ltd or as a consolidation adjustment?
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