Question
The following information is available for cash-generating unit Alpha: Cash-generating unit Alpha consists of: Carrying amount Fair value less cost of disposal 30 June 2021
The following information is available for cash-generating unit Alpha:
Cash-generating unit Alpha consists of:
Carrying amount | Fair value less cost of disposal | |
30 June 2021 | 30 June 2021 | |
Building | 2 500 000 | 2 100 000 |
Land | 500 000 | 430 000 |
Machinery | 1 600 000 | 1 450 000 |
Goodwill | 400 000 | - |
5 000 000 |
The recoverable amount of cash-generating unit Alpha was determined as R4 000 000 on 30 June 2021.
REQUIRED:
1.1) Discuss when an impairment test for a cash-generating unit should be undertaken. (8 marks)
1.2) Calculate the following for cash-generating unit Alpha for the financial year ending 30 June 2021:
the carrying amounts of the assets after the impairment was taken into account, and
the impairment loss that will be recognised per asset.
Round all answers to the nearest Rand and show all calculations. (31 marks)
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