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An entity uses a SENSITIVITY disclosure when a reasonably possible change in a key assumption WOULD cause the CGU's CA to exceed its RA. Required disclosures include:
AOnly the RA-CA gap
BOnly the assumption's current value
COnly the absolute change required
DThe amount by which RA exceeds CA + the assumption's current value + the amount by which the assumption must change to drive RA to equal CA (considering consequential effects on other variables)
Answer & Solution
Correct answer: D. The amount by which RA exceeds CA + the assumption's current value + the amount by which the assumption must change to drive RA to equal CA (considering consequential effects on other variables)
Paragraph 134(f)/135 requires the trio: headroom (RA − CA), assumed value, AND the change in assumption required to extinguish the headroom (with consequential effects on linked variables). This is the 'reverse sensitivity' disclosure — a signal of how close to impairment a CGU is.
Related questions
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