CERTYNEX IFRS ACADEMY

The Valtera group acquired Norvix in a business combination and recognised, under IFRS 3, goodwill on that acquisition. Its finance director notes that Valtera itself has a loyal customer base and a strong reputation, which in his view would justify its own goodwill of a comparable amount. Which statement is correct?

Valtera may recognise its own goodwill, since Norvix's goodwill has been recognised.

Norvix's goodwill arises from the acquisition; Valtera's, generated internally, is not recognised.

Both goodwills must be recognised, each at its fair value at the reporting date.

Neither goodwill can be recognised as an asset, since goodwill is never an identifiable resource of the entity.