Home › CA Final › financialreporting › Ind AS 36 — Impairment of Assets: Scope, Recoverable Amount, Indicators, Annual Review Triggers, CGU Concept › Investor recognises a dividend from a SUBSIDIARY…
Investor recognises a dividend from a SUBSIDIARY in separate FS. This is an indicator of impairment of the investment if:
AThe investor holds less than 50%
BEither (i) carrying amount in separate FS > carrying amount of investee's net assets (including goodwill) in CFS; OR (ii) the dividend EXCEEDS the total comprehensive income of the subsidiary in the period the dividend is declared
CThe dividend is paid in cash
DDividend declaration in itself is always an indicator
Answer & Solution
Correct answer: B. Either (i) carrying amount in separate FS > carrying amount of investee's net assets (including goodwill) in CFS; OR (ii) the dividend EXCEEDS the total comprehensive income of the subsidiary in the period the dividend is declared
Ind AS 36 has a specific indicator for investments in subsidiaries / JCEs / associates measured at cost in SFS — dividend received accompanied by either of these two conditions signals possible impairment of the investment.
Related questions
An asset's CARRYING AMOUNT under Ind AS 36 is computed as:A corporate asset (e.g. HQ building) contributes to CGUs A, B and C. For Ind AS 36 testingINTERNAL source indicators of impairment include all of the following EXCEPT:An asset's value-in-use discount rate is largely insensitive to short-term market rate incAn entity's market capitalisation has dropped below the carrying amount of its net assets.When can an entity use a PRIOR period's recoverable amount calculation as a proxy for the An entity acquired goodwill in a BC DURING the current annual period and the goodwill was An entity tests CGU X (which has allocated goodwill) AND individual assets within X for im