Islay, I am not sure what you are suggesting. But here are the facts which can be derived from G8's publicly stated accounting policies and other public material announced to the market by G8.
G8 goodwill (for child care assets) is in the balance sheet at cost. The auditors run an impairment test for this goodwill twice annually on a discounted cash flow basis. That is, the goodwill is tested on a fair value basis. If the aggregate fair value amount is LESS than the aggregate acquisition cost, then this amount is taken to the P/L (as a loss). If the fair value amount EXCEEDS the acquisition amount, then this difference is not taken to the P/L (as a profit) - it is NOT accounted for anywhere. Accountants have strange rules!!
It is on the public record that the impaired goodwill of G8 assets EXCEEDs the acquisition cost by a very large amount. My guess is that the current excess is around $750m to $800m. This has come about because G8 has achieved two goals with its acquisitions over the 5.5 years of its existence - managed costs well and increased occupancy significantly.
Islay, once again - what is your point?
GEM Price at posting:
$3.57 Sentiment: None Disclosure: Held
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