Questions 2

Luciana Ltd owned 100% of the equity share capital of Lucito Ltd. A wholly owned subsidiary. The assets at the reporting date of Lucito Ltd were as follows: GH Goodwill 2,880 Buildings 7,200 Plants and Equipment 6 ,240 Other intangibles 2,400 Receivables and cash 1,680

On the reporting date a fire within one of Lucito Ltds buildings led to an impairment review being carried out. The recoverable amount of the business was determined to be GH 11,760 The fire destroyed some plant and equipment with a carrying value of GH 1,440 and there was no option but to scrap it. The other intangibles consist of a license to operate Sharons plant and equipment.

Following the scrapping of some of the plant and equipment a competitor offered to purchase the patent for GH 1,800 The receivables and cash are both stated at their realizable value and do not require impairment.

You are required to show how the impairment loss in Lucito Ltd is allocated amongst the assets. You are required to: Identify and explain the five (5) elements of financial statements in line with the IASB Conceptual Framework for Financial Reporting as used in IAS 1.