Andries Ltd is a company based in Francistown and has been operating for some years now. In 2020, Andries Ltd which is a cash generating unit (CGU), registered the following net assets as highlighted in the table below: P’000’ Property, plant and equip
How to calculate the value of an asset after the allocation of the impairment loss given the recoverable amount
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Andries Ltd is a company based in Francistown and has been operating for some years now. In 2020, Andries Ltd which is a cash generating unit (CGU), registered the following net assets as highlighted in the table below: P’000’ Property, plant and equip
Tuesday, December 2018 REVIEW QUESTION 2 A cash generating unit (CGU) comprising a factory, plant and...
Tuesday, December 2018 REVIEW QUESTION 2 A cash generating unit (CGU) comprising a factory, plant and equipment etc and associated purchased goodwill becomes impaired because the product it makes is overtaken by a technologically more advanced model produced by a competitor. The recoverable amount of the cash generating unit falls to Tshs. 60m, resulting in an impairment loss of Tshs.80m, allocated as follows: CA before impairment CA after impairment Tshs. (m) Tshs. (m) Goodwill 10 Patent (with no market value)...
Bovine Ltd. has the following assets in a CGU: Cam thousands) The recoverable amount has been...
Bovine Ltd. has the following assets in a CGU: Cam thousands) The recoverable amount has been determined to be $3,050. The separate fair value less costs to sell for land is $1,170; no other assets could be separately valued. Required: 1. Allocate the impairment loss to individual assets and calculate the net book value of each asset after the impairment. (Enter answers in thousands of dollars.) Car e Proportion thousands impairment Netbook value Ements Buning S050 2. Assume that the...
Question 12. A cash generating unit (CGU) comprises property with a carrying amount of $400,000, plant...
Question 12. A cash generating unit (CGU) comprises property with a carrying amount of $400,000, plant with a carrying amount of $100,000 and goodwill with a carrying amount of $50,000. The property has a fair value less costs to sell of $380,000, and a value in use of $350,000. The CGU has a fair value less costs to sell of $440,000 and a value in use of $460,000. Which of the following statements is true? The maximum impairment loss allocated...
Bison Transportation has a December 31 year end and uses straight-line depreciation for all property, plant...
Bison Transportation has a December 31 year end and uses straight-line depreciation for all property, plant and equipment. On July 1, 2012, the company purchased equipment on account for $500,000. The equipment had an expected useful life of 10 years and no residual value. On December 31, 2015, after recording depreciation, Bison reviewed its equipment for possible impairment. Bison determined that the equipment had a recoverable amount of $225,000. a) Prepare the journal entries to record the asset purchase in...
Impairment of assets Fresh Ltd has two retail businesses that represent separate cash generating units, ‘Fresh...
Impairment of assets Fresh Ltd has two retail businesses that represent separate cash generating units, ‘Fresh Juice Bar’ and ‘Fresh Salads’. At 30 June 2019, the carrying amounts of the assets of the units, valued pursuant to the cost model, are as follows: Fresh Juice Bar Fresh Salads $ $ Cash 18,000 14,000 Inventory 4,000 3,000 Fixtures and fittings 50,000 65,000 Accumulated depreciation – fixtures and fittings (45,000) (15,000) Equipment 65,000 90,000 Accumulated depreciation – equipment (30,000) (30,000) Motor vehicles ...
The cash flow statement reports the cash purchases for property, plant and equipment. How much did...
The cash flow statement
reports the cash purchases for property, plant and equipment. How
much did the company purchase and sell?
Property, Plant and Equipment Property, plant and equipment, which includes assets under capital leases, are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from...
Last year Argos Company sho reos Company showed a negative cash flow from operating activities. What...
Last year Argos Company sho reos Company showed a negative cash flow from operating activities. What Ad! á be the reasons for this and should the business's management be concerned o. Assume that you have been invited to a meeting ABC's Company's board of directors to address some financial reporting questions which have emerged. During the meeting. Director NMA asks the following questions: Director NMA: "Each year we spend significant amounts on things like brand development, research and development (R&D...
Tuesday, December 2018 REVIEW QUESTION 2 A cash generating unit (CGU) comprising a factory, plant and equipment etc and associated purchased goodwill becomes impaired because the product it makes is overtaken by a technologically more advanced model produced by a competitor. The recoverable amount of the cash generating unit falls to Tshs. 60m, resulting in an impairment loss of Tshs.80m, allocated as follows: CA before impairment CA after impairment Tshs. (m) Tshs. (m) Goodwill 10 Patent (with no market value)...
Bovine Ltd. has the following assets in a CGU: Cam thousands) The recoverable amount has been determined to be $3,050. The separate fair value less costs to sell for land is $1,170; no other assets could be separately valued. Required: 1. Allocate the impairment loss to individual assets and calculate the net book value of each asset after the impairment. (Enter answers in thousands of dollars.) Car e Proportion thousands impairment Netbook value Ements Buning S050 2. Assume that the...
The cash flow statement
reports the cash purchases for property, plant and equipment. How
much did the company purchase and sell?
Property, Plant and Equipment Property, plant and equipment, which includes assets under capital leases, are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from...
Last year Argos Company sho reos Company showed a negative cash flow from operating activities. What Ad! á be the reasons for this and should the business's management be concerned o. Assume that you have been invited to a meeting ABC's Company's board of directors to address some financial reporting questions which have emerged. During the meeting. Director NMA asks the following questions: Director NMA: "Each year we spend significant amounts on things like brand development, research and development (R&D...
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