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Hi,
Would it be wrong to do the full depreciation of the goodwill (-90,000) and then make the rest of the impairment on a pro-rata basis:
Buildings -15,000 (30,000*(100,000/(100,000+50,000+50,000))
Franchise costs -7,500 (30,000*(50,000/(100,000+50,000+50,000))
Other net assets -7,500 (30,000*(50,000/(100,000+50,000+50,000))After the impairment, all the assets are higher than their realisable value.
Hi,
But if we didn’t have the option to resell the franchise, we should impair it by 50 000?
The value of an asset is the maximum of its value at use and its recoverable price right? How can we be so sure that the value at use is less than 30 000? Of course the assets of the cash generating are impaired but why would it fall specifically on the franchise?
