a mining entity group extracts a metal ore that does not have an active market until 612442

A subgroup with goodwill that is not an operating segment for the group

A mining entity (group) extracts a metal ore that does not have an active market until it has been through a smelting and refining process. Each mine is held in a separate subsidiary, as is the refinery. The refinery and subsidiaries are located in several different countries. The entity considers the CGU to comprise the subsidiary that holds the smelter together with the subsidiaries that hold the individual mines. The CGU is also the entity’s operating segment.

The entity acquires a group of mine-holding subsidiaries in a country where there is a requirement to prepare consolidated financial statements at the highest level within that country. These consolidated financial statements, which are prepared using the acquisition method by the relevant intermediate parent, include goodwill. The entity does not consider the subgroup to be an operating segment. However, in the subgroup’s financial statements, first of all the relevant operating segments would need to be determined from the subgroup’s perspective. If it was concluded that from the subgroup’s perspective there was only one operating segment, this would be the maximum level at which goodwill is tested for impairment in the subgroup’s consolidated financial statements.