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June 10, 2020 at 9:07 pm
I am thankful for this class as well as the other classes they have been very helpful. Thank you Christopher and the Open Tuition team, God bless you all.
Out of curiosity;
1) Should the new carrying value after impairment of buildings be used to calculate the next year’s depreciation?
2) If the total value of buildings were scrapped out while allocating impairment should buildings be written off from the accounts? If yes, how?
3) Also if the total value of buildings were scrapped out while allocating impairment and some impairment still remains can Plant & Equipment be further impaired?
Thank you again for being available.
November 19, 2019 at 10:03 pm
could you please clarify the order of impairment losses allocation in case of CGU. As I remember IAS 36 said that goodwill should always been the first
Kind regards, Igor
June 9, 2020 at 9:38 pm
I agree. IAS 36 paragraph 104 says:
An impairment loss shall be recognised for a cash?generating unit (the smallest group of cash?generating units to which goodwill or a corporate asset has been allocated) if, and only if, the recoverable amount of the unit (group of units) is less than the carrying amount of the unit (group of units). The impairment loss shall be allocated to reduce the carrying amount of the assets of the unit (group of units) in the following order: (a) first, to reduce the carrying amount of any goodwill allocated to the cash?generating unit (group of units); and (b) then, to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units).
July 16, 2020 at 7:34 pm
“When an impairment loss is recognised for a cash- generating unit, the loss should be allocated between the assets in the unit in the following order: (a) First, to any assets that are obviously damaged or destroyed (b) Next, to the goodwill allocated to the cash generating unit (c) Then to all other assets in the cash-generating unit, on a pro rata basis”
That’s what BPP study materials say… If some NCA is destroyed and can be used only for scrap (which means that patents and licences according to this NCA’s are also appears to be scrap) these assets should be written off before Goodwill
correct me if I’m wrong
October 30, 2019 at 9:25 pm
I am studying the BPP Financial reporting text for June 2020 exams and it says that in cases of impairment of cash generating units, the goodwill should always be impaired first. In your example you impaired the entire amount of the specific asset and then the Goodwill next. Can you tell me which is correct, thanks!
October 30, 2019 at 9:28 pm
Sorry I should clarify that in the text, there is a question which specifies an asset destroyed in a terrorist attack. Yet the goodwill is still impaired in full and the asset which has a carrying amount of 1million is impaired by the remainder of the impairment, 0.9million. This means there is a carrying amount of 0.1 still on the books for the destroyed asset? Is that right?
May 29, 2019 at 5:01 pm
It would be great if you could include a video on reversal of Impairment loss too with an example.
July 19, 2019 at 3:39 pm
Yes please do Sir! Also, what is the difference between Revaluation and Reversal of an Impairment loss?
Thanks in advance 🙂
April 12, 2019 at 9:02 pm
Dear sir, A very quick question for you. When we have an impairment loss to allocate and our CGU consists of goodwill and a damaged asset on top of the rest assets. Do we deduct first the value of the damaged asset from impairment and then write off the goodwill or the other way around?
January 8, 2019 at 8:44 am
Can you further clarify why the remaining 4000 in the Plant and equipment was not impaired on pro rata basis ?
January 11, 2019 at 4:44 pm
He details this at around 14 minutes.
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