Skip to content
ACCA exam results — Are you ready?Chat about it >>

Ask the Tutor ACCA FR

CGU Question(Similar scenario to lecture video, but contradicts with BPP answer)

JJoel7y ago
A cash generating unit comprises the following assets: $ 000 Building 700 Plant and equipment 200 Goodwill 90 Current assets 20 ____ 1010 One of the machine carried at $40000 is damaged and will have to be scrapped. The recoverable amount of the cash generating unit is estimated at $ 750000. What will be the carrying amount of the building when the impairement loss has been recognized? A)$597000 B)$577000 C)$594000 D)$548000 In your lecture video, I understand your reasoning for not further impairing P+E after removing the destroyed P+E. But in this question, BPP also includes the remaining P+E in the pro-rata impairment calculation along with Building, giving answer C. While following your method I got $570000. Can you please assist? Not sure if I may have gotten confused somewhere along. Thanks
PP2-D2Tutor7y ago#1
Hi, If there is nothing specific in the question then the impairment is allocated against the category that has suffered the impairment. The example in the notes is more specific given the assets involved. Thanks
Sign in to reply to this topic.