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 to the property is $20,000
The total impairment loss in the CGU is $110,000
The impairment loss is pro-rated between all assets within the scope of IAS 36
The impairment loss allocated to plant is $8,000
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Question 12. A cash generating unit (CGU) comprises property
with a carrying amount of $400,000, plant...
Tuesday, December 2018 REVIEW QUESTION 2 A cash generating unit (CGU) comprising a factory, plant and...
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Question Three: IAS 76 Property, Plant and Equipment requires that where has been a permanent diminution...
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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)...
On September 1, 2020, Flounder Corporation acquired Tunneling Limited for a cash payment of $864,700. At the time of purchase, Tunneling's statement of financial position showed assets of $905,000, liabilities of $462,400, and owners' equity of $442,600. The fair value of Tunneling's assets is estimated to be $1,165,000. Assume that Flounder Corporation is a public company and that the goodwill was allocated entirely to one cash- generating unit (CGU). Two years later, information about the CGU is as follows: carrying...
The Beverages Division is regarded as a cash-generating unit of Beta Ltd. At 30 June 2019, the carrying amounts of the assets of the CGU were as follows: Premises Inventory Machinery Vehicles Goodwill $700,000 90,000 200,000 50,000 50,000 IS Beta Ltd measured the value in use of the Beverages Division at 30 June 2019, determining it to be $1,000,000. The company also determined that the fair value of the premises is $690,000 Required a. Explain why impairment testing requires the...
Problem 1 The Faris Corporation has determined that there may be indicators of impairment for one of their assets - an office building that is currently leased out and a cash generating unit (CGU) representing a business unit. Data for the building and CGU follow. The year end is December 31, 20x4. Building Carrying value (20 years remaining, $500,000 residual value) Fair value Costs to sell Future cash flows generated by building (each year to the end of its useful...
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