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A cash-generating unit comprises the following assets:
Building 700000
Plant and equipment 200000
Goodwill 90000
Current assets 20000
1010000
One of the machines 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 after the impairment loss has been recognised?
(to the nearest ‘000)
In this question why the impairment loss has been allocated to the remainder of the plant and equipment after 40000 has been deducted from the plant and equipment because in the example in the notes on cash generating unit the impairment loss has not been allocated to the remainder of the plant and equipment after deducting the plant and equipment destroyed by fire.
Also why impairment loss is not allocated to the current assets in this question whilst it is not mentioned in this question that they are at realisable value whereas impairment loss was not allocated to cash and receivables in the example in the notes because they were at realisable value.IAS 36 does not apply to assets held under IAS 2 (inventory) or held under IAS 39 (receivables). Thanks.
In this question why the impairment loss has been allocated to the remainder of the plant and equipment after 40000 has been deducted from the plant and equipment because in the example in the notes on cash generating unit the impairment loss has not been allocated to the remainder of the plant and equipment after deducting the plant and equipment destroyed by fire
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