hard · CFA Level I Financial Statement Analysis
Amberfen Pharma acquires a smaller competitor, resulting in the recognition of 200 million in goodwill. Three years later, Amberfen determines that the reporting unit's fair value has fallen below its carrying amount. Under IFRS, an impairment loss of $50 million is recognized. In the following year, the unit's value recovers.
Amberfen should:
- Reverse the 50 million impairment through profit and loss
- Maintain the carrying value at the impaired level
- Reverse the impairment only through Other Comprehensive Income
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