Determine how any impairment loss shall be allocated

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Question - The carrying amounts of the assets of a cash-generating unit (CGU) on 31 December 2017 are as follows:

Goodwill - $ 300

Land - 1,700

Building - 1,100

Equipment - 1,300

Inventory - 500

Receivables - 700

Cash - 200

Total - $5.800

The fair value of the CGU is estimated to be $3,000 while the value-in-use (VIU) to be $3,300. The CGU has no liabilities.

Additional information:

Fair value less costs of disposal of receivables is $450. Fair value less costs of disposal of land is $1,500.

Required

(a) Determine whether the CGU is impaired.

(b) If the CGU is impaired, determine how any impairment loss shall be allocated among the assets of the CGU.

Reference no: EM131579737

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