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At 30 June 2014, Longreach Ltd is considering undertaking an impairment test. Having only recently adopted the international accounting standards, the management of Longreach Ltd seeks your advice in relation to this test under AASB 136 Impairment of Assets.
Required:
Write a report to management, specifically explaining:
1. The purpose of the impairment test
2. How the existence of goodwill will affect the impairment test
3. The basic steps to be followed in applying the impairment test.
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