1) From the consolidation perspective, what would be the likely overall effect of adopting IFRS on the company’s financial statements?

From the consolidation perspective, the likely overall effect of adopting IFRS on the company’s financial statements would preserve and strengthen the company’s global financial competitiveness. Moreover, it will simplify the accounting and consolidation process significantly and reduce financial reporting costs.

2) What potential effect would arise if Klugen were to select the option under IFRS 3 to value non-controlling interest at the proportionate share of its subsidiaries’ net identifiable assets?

For business combination, the buyer can control without buying all of the equity, the remaining , so-called the non-controlling, equity interests are measure either at fair value or at the non-controlling interests’ proportionate share of its subsidiaries’ net identifiable assets. Under IFRS 3, the potential effect would arise is that it will result in benefits for users by improving comparability and will increase the relevance of information provided. Moreover, it identifies and evaluates the main costs and benefits for users.

3) Do you believe that an impairment of goodwill would be more likely under IFRS or under U.S. GAAP? Why or why not?

There is a difference in goodwill impairment measurement. Under U.S GAAP, two-step approach is used. It looks to the reporting unit. However, under IFRS, one-step approach is used. It is based on the value in use and it looks to the cash-generating unit. The cash-generating unit is smaller than reporting unit and leads to more impairment of goodwill. I believe that an impairment of goodwill would be more likely under IFRS. Under IFRS, good will is no longer deemed to have a finite life and therefore it is not subject to be amortized. It is treated as having an indefinite life and