Calculate the CGU recoverable amount and carrying amount

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Point 1: One of a company's cash-generating units is being tested for impairment. The carrying amount of the CGU's assets on the date of the test is £25 million. The carrying amount of its liabilities on that date is £8 million.

Point 2: It has been established that the CGU could be sold to a buyer for £15 million, in which case the buyer would take over all of the CGU's assets and liabilities. Disposal costs would be immaterial. The value in use of the CGU is estimated to be £24 million. This figure ignores future cash outflows relating to payment of the CGU's existing liabilities.

Required:

Question 1: Calculate the CGU's recoverable amount and carrying amount. Also calculate the amount of any impairment loss. Solve this Question.

Reference no: EM132512807

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