Contrast the recognition and impairment of goodwill

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Question - (a) Investor A has 30 percent of the voting rights of the investee as well as an option to acquire additional 35 percent of the investee's voting rights. The option is currently exercisable at a fixed price, that is deeply out of the money and is expected to remain so in the next two-year period. In accordance with HKAS 28 (Investments in Associates and Joint Ventures, 2011), determine if investor A has significant influence over the investee and discuss in general what factors should be considered in assessing the existence of significant influence.

(b) Contrast the recognition and impairment of goodwill in consolidation with that under equity method.

Reference no: EM132967207

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