When a company acquires control over another company, then often a goodwill arises, too. You should present it as an intangible asset, but when you think about it carefully, a goodwill is not a typical asset, because unlike other assets, you cannot sell it to somebody, you cannot use it in your production process or impairment of investment in subsidiary provide your services.

Well, OK, but how to test goodwill for impairment every year? I respond to that question quite frequently, because although IAS 36 prescribes the extensive rules about goodwill impairment, it’s not so easy to understand the logic behind. Before we explain how to test goodwill for impairment, you need to understand what a goodwill is all about. CU 20 000 more than the fair value of a company is.