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A 'cash-generating unit' (CGU) under Ind AS 36 is defined as:
AAny subsidiary
BThe smallest identifiable group of assets that generates cash inflows that are LARGELY INDEPENDENT of the cash inflows from other assets or groups of assets
CAny physical location of the entity
DThe reporting segment
Answer & Solution
Correct answer: B. The smallest identifiable group of assets that generates cash inflows that are LARGELY INDEPENDENT of the cash inflows from other assets or groups of assets
CGU is identified by the cash-flow independence test — smallest group whose inflows are largely independent of other assets/groups. The legal/structural unit does not drive CGU identification; cash-flow independence does.
Related questions
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