Goodwill that arises from the acquisition of a company must be subjected to an impairment test each year. This test is performed by first allocating the goodwill to the relevant cash-generating units. The need for an impairment charge to a cash-generating unit is determined by comparing the carrying value of the unit with its recoverable amount. If the recoverable amount is less than the carrying value, the difference between these two figures is recognised to the income statement as an impairment charge. Any remaining difference is allocated to the other assets in the cash-generating unit in proportion to their carrying values. All impairment charges are recognised immediately to the income statement. Subsequent increases in value are not permitted. If an acquisition results in goodwill, the carrying value of the cash-generating unit is increased by the carrying value of the goodwill. This total is subsequently compared to the recoverable value of the cash-generating unit, and any negative difference is reflected in an impairment charge to goodwill.

The acquisition of project companies generally leads to positive goodwill because accounting rules require the recording of deferred tax liabilities on revalued properties. The unequal valuation of these deferred tax liabilities -which, in contrast to other acquired net assets, may not be discounted according to IFRS 3.57b in connection with IFRS 3.B16 (i) and IAS 12.53 – results in goodwill as a technical figure, which is subjected to an impairment test at the time of initial recognition. The fact that this type of goodwill only arises because of the deferred tax liabilities that result from the valuation method required by IFRS generally leads to an impairment charge equal to the undiscounted part of the deferred tax liability. This need for an impairment charge is reflected in the write-down of goodwill.