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CGU

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › CGU

  • This topic has 4 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • October 2, 2015 at 7:17 pm #274726
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    Good day Sir

    The net assets of Agrippa a CGU.

    The property , Plant and Equipment 240
    Motor Vehicles 115
    Allocated Goodwill 60
    Purchased Brand name 120
    Net current assets at net realisable 30

    As a result of adverse publicity Agrippa has a recoverable amount of only 450. The brand name has been expertly valued of 95.

    please help with this question

    I said 450-60=390 and 390*95/(95+240+30)=101.50 please helpme

    October 2, 2015 at 9:13 pm #274743
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    PPE 240
    MV 115
    NCA 30

    Total 385
    Brand 120
    G/w 60

    Total 565

    Write off 25 from brand leaving 540
    Write off 60 from goodwill leaving 480
    Write off 30 against other assets PPE and MV in proportion so 20 against PPE and 10 against MVs

    What does the answer do?

    October 3, 2015 at 7:42 pm #274839
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    Good evening Sir

    I am trying to work it out but I can’t understand please can you explain to me where does 20 come from for PPE and MVs where did this 20 come.

    October 3, 2015 at 7:44 pm #274840
    george99
    Member
    • Topics: 9
    • Replies: 14
    • ☆

    I will glad if you can work it out for me and explain to me.

    October 3, 2015 at 8:34 pm #274846
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    We have to write off 115. Agreed?

    25 from the brand and 60 from goodwill should be obvious to you too

    That leaves 30 more against the remaining assets on a pro rata basis but no asset should be reduced below recoverable amount

    Brand and net current assets are already at recoverable amount so the 30 must go against PPE and MVP in their ratio of 240:115 and that’s approximately 20:10

    Ok?

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