Document ID: chunk:federal_register_of_legislation:F2023C00180:front:0:p58
Version: federal_register_of_legislation:F2023C00180
Segment Type: other
Provision Reference: 
Character Range: 172536–176201

recoverable amount of CU1,000 but has not been recognised in Parent's consolidated financial statements. Therefore, in accordance with paragraph C4 of Appendix C of AASB 136, the carrying amount of Subsidiary is grossed up to include goodwill attributable to the non-controlling interests, before being compared with the recoverable amount of CU1,000. Goodwill attributable to Parent's 80 per cent interest in Subsidiary at the acquisition date is CU400 after allocating CU500 to other cash-generating units within Parent. Therefore, goodwill attributable to the 20 per cent non-controlling interests in Subsidiary at the acquisition date is CU100.
 Schedule 1. Testing Subsidiary for impairment at the end of 20X3

End of 20X3                             Goodwill of Subsidiary  Net identifiable assets  Total

                                        CU                                               CU        CU

Carrying amount                         400                                              1,350     1,750
Unrecognised non-controlling interests  100                                              –         100
Adjusted carrying amount                500                                              1,350     1,850
Recoverable amount                                                                                 1,000
Impairment loss                                                                                    850

Allocating the impairment loss
IE66 In accordance with paragraph 104 of AASB 136, the impairment loss of CU850 is allocated to the assets in the unit by first reducing the carrying amount of goodwill.
IE67 Therefore, CU500 of the CU850 impairment loss for the unit is allocated to the goodwill. In accordance with paragraph C6 of Appendix C of AASB 136, if the partially-owned subsidiary is itself a cash-generating unit, the goodwill impairment loss is allocated to the controlling and non-controlling interests on the same basis as that on which profit or loss is allocated. In this example, profit or loss is allocated on the basis of relative ownership interests. Because the goodwill is recognised only to the extent of Parent's 80 per cent ownership interest in Subsidiary, Parent recognises only 80 per cent of that goodwill impairment loss (ie CU400).
IE68 The remaining impairment loss of CU350 is recognised by reducing the carrying amounts of Subsidiary's identifiable assets (see Schedule 2).
 Schedule 2. Allocation of the impairment loss for Subsidiary at the end of 20X3

End of 20X3                            Goodwill  Net identifiable assets  Total
                                       CU                                 CU        CU
Carrying amount                        400                                1,350     1,750
Impairment loss                        (400)                              (350)     (750)
Carrying amount after impairment loss  –                                  1,000     1,000

Example 7B  Non-controlling interests measured initially at fair value and the related subsidiary is a stand-alone cash-generating unit
 In this example, tax effects are ignored.

Background
IE68A Parent acquires an 80 per cent ownership interest in Subsidiary for CU2,100 on 1 January 20X3. At that date, Subsidiary's net identifiable assets have a fair value of CU1,500. Parent chooses to measure the non-controlling interests at fair value, which is CU350. Goodwill of CU950 is the difference between the aggregate of the consideration transferred and the amount of the non-controlling interests (CU2,100 + CU350) and the net identifiable assets (CU1,500).
IE68B The assets of Subsidiary together