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Hello,
I had a question with regards to Impairment of CGU.
In question 2 for the practice questions in the quiz for IAS 36, we were given the value of two engines and 5/6th of the value of 1 engine was scrapped off. In the end, there was pro rata allocation of impairment to the second engine (balance of the engines) after goodwill and specific assets impairment. In the notes for FR, however, in question 3, it was stated that post the specific impairment of $ 1.2 million to Plant and Equipment, we cannot allocate any remaining impairment to the balance of Plant and Equipment.
Why do we treat this balancing impairment differently? When do we allocate impairment to the balancing figures of some assets and when do we not?
Thank you.
Hi,
It all depends on the circumstances in the question and you would be given enough information in the question to make sure that you do things correctly. I have made an assumption that none of the other items of PPE are impaired as our impairment review has covered all of the assets. Different assumptions have been made in the other question.
Thanks
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