- 7 Marks
CR – Mar 2024 – L3 – Q2b – IAS 36: Impairment of Assets
This question focuses on determining impairment losses and adjusting carrying values for the CGUs of Sikaman Plc, considering head office allocation.
Question
Sikaman Plc has three cash-generating units (CGUs), a head office, and a research facility. The carrying amounts of the assets and their recoverable amounts are as follows:
| Unit X | Unit Y | Unit Z | Head Office | Research Facility | Sikaman Plc | |
|---|---|---|---|---|---|---|
| Carrying value (GH¢m) | 500 | 700 | 1,000 | 750 | 250 | 3,250 |
| Recoverable amount (GH¢m) | 645 | 820 | 1,355 | – | – | 2,920 |
The assets of the head office can be reasonably allocated to the three units as follows:
- Unit X: GH¢95m
- Unit Y: GH¢280m
- Unit Z: GH¢375m
The assets of the research facility cannot be reasonably allocated to the CGUs.
Required:
Assuming all assets can be adjusted for impairment, show how the revised/adjusted carrying values of the assets of Sikaman Plc should be determined in line with IAS 36: Impairment of Assets after taking into account any impairment losses in the above scenario. Show the relevant financial statements extracts.
Find Related Questions by Tags, levels, etc.
- Tags: Carrying Value, CGU, Head Office Allocation, IAS 36, Impairment, Research Facility
- Level: Level 3
- Topic: IAS 36: Impairment of assets
- Series: MAR 2024
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