Blues Limited (“Blues”) prepares its financial statements to 31; December each year. The company manufactures paint, and its operations are divided into two cash-generating units:

domestic and commercial. The following issue needs to be resolved before the financial statements for the year ended 31 December 2017 can be finalised. The following information is available in relation to the two cash-generating units.

Domestic Commercial

€000 €000 Goodwill = 1,200 Other intangible assets ; 1,500 300 Property 2,400 6,400 Plant and equipment 3,300 1,400 Historic cost-based carrying value 7,200 9,300 Fair value less costs of disposal 7,500 4,200 Future net cash inflows:

2018 1,200 1,200 2019 900 1,300 2020 2,700 1,600 2021 1,500 1,500 2022 1,600 900 2023 1,800 1,800 Discount rate appropriate to activities of cashgenerating units 10% 12%

Requirement

(a) Calculate whether an impairment loss arises for either of the two cash-generating units, domestic and commercial.

(b) Allocate any impairment loss arising in accordance with LAS 36 Impairment of Assets.
Present value factors:
Rate/Period 1 2 3 4 5 6 10% 0.909 0.826 0.751 0.683 0.620 0.564 12% 0.893 OOF aly. 0.636 0.567 0.507