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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 30As 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
PPE 240
MV 115
NCA 30Total 385
Brand 120
G/w 60Total 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 MVsWhat does the answer do?
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.
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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