1. When should an entity conduct an impairment test? (2 Marks)
Assets that are consider to have uncertain carrying amounts must be tested every year for impairment.
Goodwill acquired in a business combination Intangible assets with an indefinite useful life Intangibles not yet ready for use
Impairment testing of all other assets is required only if there is an indication that they might be impaired due to events such as the economic and legal environment and market values etc.
2. How is an impairment test undertaken? (2 Marks)
The test involves comparing the carrying amount of an assets or CGU with its recoverable amount. The…show more content… Show all workings. (3 Marks) You can drop to 150 ÷ 450
CA Allocation New CA Land 150000 (150000 ÷ 450000) 17333 132667 Truck 250000 (250000 ÷ 450000) 28889 221111 Service Unit 50000 (50000 ÷ 450000) 5778 44222 450000
Round to nearest dollar from 0.50
16. Tuart Ltd has determined that its retail division has suffered an impairment loss of $37 000 for the year ended 30 June 2013. At that date the carrying amount of the division’s assets were $ Inventory 92 000 Shop Fittings (net) 40 000 Land 100 000 Buildings 180 000
Additionally, the company has corporate assets worth $150 000, one third of which have been allocated to the retail division.
Required Allocate the loss across the assets of the CGU in accordance with AASB 136, paragraph 104. Show all workings (3 Marks)
CA Allocation New CA Shop fittings 40000 (40000 ÷ 370000) 4000 36000 Land 100000 (100000 ÷ 370000) 10000 90000 Building 180000 (180000 ÷
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