The CFAI book II on page 157 explains in topic on goodwill impairment:
“Under IFRS, at the time of acquisition, the total amount of goodwill recognized is allocated to each of the acquirer’s cash-generating units that will benefit from the expected synergies resulting from the combination with the target.”
But earlier in the example it shows that it is not true. On page 155 it shows “Example 9” entitled “Goodwill”. There it says:
“Under the partial goodwill method (IFRS only), goodwill on the parent’s consolidated balance sheet would be €36,000, the difference between the purchase price and the parent’s proportionate share of the subsidiary’s identifiable assets.”
Then in consolidated BS after aquisition, goodwill is placed as a separate line of 36000 EUR and not allocated into “cash-generating units” which I understand would be PP&E or other lines of the balance sheet.
I don’t understand it. Any help?