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The Beverages Division is regarded as a cash-generating unit of Beta Ltd. At 30 June 2019, the carrying amounts of the assets of the CGU
The Beverages Division is regarded as a cash-generating unit of Beta Ltd. At 30 June 2019, the carrying amounts of the assets of the CGU were as follows: Premises Inventory Machinery Vehicles Goodwill $700,000 90,000 200,000 50,000 50,000 Beta Ltd measured the value in use of the Beverages Division at 30 June 2019, determining it to be $1,000,000. The company also determined that the fair value of the premises is $690,000. Required a. Explain why impairment testing requires the use of cash generating units (CGU). b. Prepare the journal entry to account for the impairment loss at 30 June 2019 according to the requirements of AASB 136 Impairment of Assets. Explain the rationale for each working and journal entries
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