CERTYNEX IFRS ACADEMY

The Ostral group acquired Kemri two years ago; the goodwill arising from this business combination was recognised under IFRS 3. Since then, Ostral's own profitability and reputation have increased sharply. A consultant proposes applying to Ostral the valuation multiple used for Kemri in order to recognise goodwill specific to Ostral, measured consistently. What position do you take?

Accept the proposal: using the same multiple ensures a valuation consistent with Kemri's goodwill.

Refuse: Ostral's own goodwill is internally generated and is not recognised.

Accept the proposal, recognising Ostral's goodwill in other comprehensive income rather than in profit or loss.

Also derecognise Kemri's goodwill, so as to treat the group's two goodwills consistently.