Home › CA Final › financialreporting › Ind AS 36 — Impairment of Assets: Scope, Recoverable Amount, Indicators, Annual Review Triggers, CGU Concept › A corporate asset (e.g. HQ building) contributes…
A corporate asset (e.g. HQ building) contributes to CGUs A, B and C. For Ind AS 36 testing of CGU A:
AExclude corporate assets entirely
BAllocate the carrying amount of the corporate asset to A on a REASONABLE AND CONSISTENT BASIS (e.g. revenue / asset proportion) if such allocation can be done; otherwise test the smallest group of CGUs that the corporate asset can be reasonably allocated to
CAllocate to CGUs only when goodwill is impaired
DAllocate the corporate asset entirely to CGU A
Answer & Solution
Correct answer: B. Allocate the carrying amount of the corporate asset to A on a REASONABLE AND CONSISTENT BASIS (e.g. revenue / asset proportion) if such allocation can be done; otherwise test the smallest group of CGUs that the corporate asset can be reasonably allocated to
Ind AS 36 paragraph 102: corporate assets must be tested via allocation to CGUs on a reasonable and consistent basis. If allocation isn't feasible at the single-CGU level, escalate to the smallest group of CGUs to which allocation IS reasonable.
Related questions
An asset's CARRYING AMOUNT under Ind AS 36 is computed as:INTERNAL 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 imInvestor recognises a dividend from a SUBSIDIARY in separate FS. This is an indicator of i