AMP company

Introduction
AMP has today flagged a possible $1.2 billion write down of its troubled offshore assets. The Chief Executive Andrew Mohl says AMP believes the carrying value of these assets is unlikely to recover for some time and it will therefore be prudent to reflect a more realistic view in the balance sheet. Therefore, he says the write- downs will largely be goodwill and not impact on the net assets of AMP¡¯s UK businesses. As the issue above, we make some definitions, analysis and comments.

1. Give a brief summary of the circumstances which give rise to goodwill.

a. Goodwill can only be recognized when an acquisition results in gaining control of an operation or entity. This term is defined and discussed in AASB 1013. As the AASB 1016, s 5.1 described, any difference between the cost of the investment...