Home › CA Final › financialreporting › Ind AS 36 — Impairment Loss Recognition, CGU Identification, Goodwill Allocation to CGUs, Disposal within CGU › An entity sells the output of an asset partially…
An entity sells the output of an asset partially internally and partially externally. An active market exists for that output. The asset should be:
AExcluded from CGU testing
BCombined with the entity-as-a-whole CGU
CCombined with other internal assets into a single CGU
DIdentified as a SEPARATE CGU on its own (because an active market exists, the entity COULD sell on it — independence of cash inflows is satisfied)
Answer & Solution
Correct answer: D. Identified as a SEPARATE CGU on its own (because an active market exists, the entity COULD sell on it — independence of cash inflows is satisfied)
Ind AS 36 paragraph 70: where an active market exists for the output, the asset/group can be classified as a separate CGU regardless of internal use. Internal transfer pricing is replaced by management's best estimate of arm's-length prices for VIU computation.
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