Question 2

2.1. At 28 February 2022, ST Ltd is operating a business division identified as a Cash Generating Unit. The following information relates to a Cash Generating Unit (CGU) of ST Ltd for the year ended 28 February 2022

*Building R40 000 000

* Intangible Asset R 8 000 000

*Goodwill R12 500 000

* Inventory R 2 000 000

An Impairment test was carried out on the 28 February 2022 and the Cash Generating Unit now has a fair value of R50 000 000.The related disposal cost is R4 500 000.The value in use is R36 000 000

Required:

1. CALCULATE AND ALLOCATE THE IMPAIRMENT LOSS OF THE CGU FOR THE YEAR ENDED 28 February 2022

2. ROUND OFF TO THE NEAREST RAND