02-06-2006, 05:50 PM
The issue of goodwill arises in case of subsidiaries and/or insvestments in associates. Since the holding is merely 10% so it will most likely be treated in either of two ways
1- as financial assets held for trading. Fair value accouting will be used and changes in fair value will be reflected in net profit and loss
2-as available for sale financial assets. Fair value. Enterprise has a one-time, enterprise-wide choice of reporting changes in fair value
(a) in net profit or loss or
(b) in equity until the asset is sold or otherwise disposed of, at which time the cumulative gain or loss is reported in net profit or loss.
(Souruce accountancy.com IASs summaries)
