Tata Group companies continued with the trend of reporting goodwill impairment on their acquisitions across businesses. The latest Tata Group company to report impairment on account of goodwill erosion is Indian Hotels Company, which runs hotels under the Taj, Vivanta, Gateway and Ginger brands.
According to reports, Indian Hotels said it expected non-cash provision for impairment in respect of financial exposure in its global and domestic investments. This provision will be over and above the Rs. 678 crore already written off on investment in Orient-Express Hotels.
Goodwill is the excess amount a company pays to acquire another company's assets over its book value. Goodwill impairment is done when a company thinks that the asset it has acquired has lost value in comparison to the value at which it had originally acquired.
Higher goodwill impairment translates in to lower earnings per share as the non-cash provision is made against current year's income. In 2007, Tata Steel concluded the acquisition of Anglo-Dutch steelmaker Corus for $13 billion, but the company reported a goodwill impairment of Rs. 8,800 for fiscal ending March 2013 as of last year's exchange rate.
According to reports, Tata Motors was forced to write off its Rs. 700-crore investment in Spanish bus maker Hispano Carrocera. Tata Chemicals, too, wrote off Rs. 484-crore investments in its European operations.
According to reports, Indian Hotels said it expected non-cash provision for impairment in respect of financial exposure in its global and domestic investments. This provision will be over and above the Rs. 678 crore already written off on investment in Orient-Express Hotels.
Goodwill is the excess amount a company pays to acquire another company's assets over its book value. Goodwill impairment is done when a company thinks that the asset it has acquired has lost value in comparison to the value at which it had originally acquired.
Higher goodwill impairment translates in to lower earnings per share as the non-cash provision is made against current year's income. In 2007, Tata Steel concluded the acquisition of Anglo-Dutch steelmaker Corus for $13 billion, but the company reported a goodwill impairment of Rs. 8,800 for fiscal ending March 2013 as of last year's exchange rate.
According to reports, Tata Motors was forced to write off its Rs. 700-crore investment in Spanish bus maker Hispano Carrocera. Tata Chemicals, too, wrote off Rs. 484-crore investments in its European operations.
Source: News in Hindi
