First of all we must be clear that goodwill is an intangible asset that entities can recognize in their financial statements but only such goodwill that is acquired in business combination. Internal goodwill or in-house goodwill is not recognized as entity’s assets in books of accounts.
One more thing to understand is that goodwill is now prohibited to be amortised. Previously, purchased goodwill was required to be amortised over a period not exceeding 40 years. However, with the introduction of IFRS 3 this treatment has been abolished and now goodwill is only required to be tested for impairment losses on annual basis and NO systematic decrease or amortization is now allowed.
However, once an asset is impaired then IAS 36 Impairment of Assets allows the opportunity to entities to reverse the impairment losses recognized in previous period if the situation has everted and the reasons of such impairment have subsided or improved. But such reversal option is not available for goodwill recognized in the financial statements.
IAS 36 specifically prohibits the reversals of any impairment losses recognized in previous period in respect of goodwill.
Previously, entities were allowed to even reverse the goodwill impairment under specific circumstances i.e. if the impairment losses were recognized because of specific external event which is exceptional in nature and is not expected to recur and later such external events occured that reverses the effects of that previous event then impairment was allowed to be reversed. However, there is no such option now available to entity.
The reason IAS 36 gives is that if after recognising impairment losses goodwill increases in subsequent periods then such increase will be considered as increase in internal goodwill and not an increase in acquired goodwill (purchased goodwill).
And as internal goodwill is not allowed to be recognised as asset therefore, no revaluation increase or decrease can be accounted for in relation to such goodwill.