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QUESTION 1 Kygo Limited is a manufacturing company with various production lines. You are presented with the following information on some of the company's machines:
QUESTION 1 Kygo Limited is a manufacturing company with various production lines. You are presented with the following information on some of the company's machines: Machine A At the end of the current financial year, 30 June 2022, Machine A was damaged in a factory accident, but it is still in working order. On 30 June 2022, the fair value less costs of disposal of Machine A is less than its carrying amount. The value in use of Machine A cannot be determined independently of the value in use of the other assets. The smallest identifiable group of assets that includes Machine A and generates cash inflows that are largely dependent on the cash flows from other assets is the production line to which Machine A belongs. The value in use of the production line shows that the production line, taken as a whole, is not impaired. REQUIRED: 1.1) With reference to Machine A, identify the machine's cash-generating unit, and discuss whether an impairment loss (in terms of the requirements of IAS 36) must be recognised in respect of Machine A if the entity has no intention of replacing the machine. No amounts or calculations are required, only discussion based on the information given for Machine A. 445p (13 marks)
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