The new IASB standard issued with respect to the treatment of negative goodwill requires that:

Question

Quizplus · Accepted Answer

The new IASB standard requires that negative goodwill must be recognized in income immediately but not necessarily as an extraordinary item. This means that the negative goodwill should be recognized in the income statement as a gain, but it does not have to be classified separately as an extraordinary item. The standard does not allow the deferral and amortization of negative goodwill over a maximum of 40 years, nor does it require the reflection of negative goodwill as an increase in liabilities and a reduction in capital for the parent company.

The New IASB Standard Issued with Respect to the Treatment