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In (a) part
Please explain the allocation of goodwill to CGU explanation given in book
In b(2) part they have written that capital expenditure is taken into account in cash flow but we don’t include capital expenditures(a) If business cannot allocate goodwill to individual CGUs it has to do a 2 stage impairment calculation. I think the author is saying that the standard has inadequate guidance on this calculation.
(b) The client should take into account CAPEX TO MAINTAIN THE CURRENT ASSETS IN CURRENT CONDITION. They haven’t. And the BPP answer is saying that they should have.
Mercifully, since the syllabus change, we don’t tend to see the abstruse discussions in part (a)!
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