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Hello Sir,
Suppose there are 3 CGUs and a corporate asset. The corporate asset needs to be allocated to those CGUs.
The carrying amount and useful life of CGU is given.
Should we allocate the carrying amount of corporate asset on the basis of useful life of CGUs or carrying amount of CGUs?
Will it be wrong if we allocate it on the basis of carrying amount?
Hi,
The standard requires us to allocate the corporate asset on a reasonable and consistent basis, so once you’ve allocated it then the same basis should be used in future periods. Using the carrying value of the CGUs is a reasonable basis.
Thanks
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