Where a subsidiary has goodwill already recorded in their books at the date of acquisition, such goodwill should be eliminated in full and then recognised on consolidation.

Question

Quizplus · Accepted Answer

Goodwill arising in a subsidiary is not eliminated upon acquisition. Instead, goodwill is calculated at the group level during consolidation, which may involve adjustments to the carrying amount of the subsidiary's goodwill but does not involve eliminating the subsidiary's pre-existing goodwill in full before recognizing consolidated goodwill.

Where a Subsidiary Has Goodwill Already Recorded in Their Books