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Stephen Widberg.
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toushiga
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Hello Sir, for PYQ SBR Sept 2018(int) Q2 (a) sale of Newall examiner answers:
1.”no provision is required for the impairments of the owned assets as they would have been accounted for on remeasurement to fair value less costs to sell. ”
@This mean the FVLSC is lower than CA? the impairment loss is not deducted from CA?
2″ Any further impairment loss recognised to reduce Newall to fair value less costs to sell would be allocated first to goodwill and then on a pro-rata basis across the other non-current assets of the group.”
@As Newall is loss-making, will it the CA be lower than FVLSC (NFA HFS valued at lower of CA and FVLSC), so why the impairment loss is to reduce Newall to FV less cost to sell?
3.The $6 million will be offset against the corresponding lease liability with only a net figure being recorded in profit or loss.
@What does it mean? is it mean the remaining Lease liability can be offset by the restructuring provision?
Thank you.
Stephen Widberg
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1. Don’t understand your question – it’s just saying setting up a provision for reorganisation is a separate exercise from impairing assets.
2. Don’t understand your question – on impairment always allocate loss in the way described.
3. I think he means you will have a provision for onerous lease instead of a lease liability – the word ‘offset’ is a bit eccentrictoushiga
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Thank you, Sir, I’m understanding now but still have one last question
4. Why the legal cost of sale is qualified as part of restructuring provision? due to directly attributable cost?
Thank you.
Stephen Widberg
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I think it must be.
toushiga
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