Deluxe Corp. has four international divisions. One of them, Qaram Corp., was acquired on January 1, 2018, for £610,000,000 and recorded goodwill of £71,000,000 as a result of that purchase. At December 31, 2018, Qaram had a book value (including goodwill) of £375,000,000. The total recoverable amount of Qaram was £365,000,000. What amount of loss on impairment of goodwill should Deluxe record in 2018 under IFRS?

Question

Quizplus · Accepted Answer

Under IFRS, an impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The book value of Qaram, including goodwill, is £375,000,000, and the recoverable amount is £365,000,000. The impairment loss is the difference, which is £10,000,000.