4. For a cash generating unit the following carrying amounts are stated in the balance sheet:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
4. For a cash generating unit the following carrying amounts are stated in the balance sheet: Cm 50 60 Goodwill Development costs Patents 160 Machine 80 Land 550 The company could sell the CGU for a price of € 800 m, the arising selling costs are to estimate at € 2 million in the current year. If one retains the CGU the management expects to generate in the next three years a net cash flow of € 250 million per year, the market interest is so low that a "0"-level can be supposed. Value in use cannot be ascertained for any of the assets, but fair value less costs to sell is € 545 million for the land. Describe the necessary evaluation process of the CGU including a calculation and the final correct values of the CGU-assets. (10 p.) 4. For a cash generating unit the following carrying amounts are stated in the balance sheet: Cm 50 60 Goodwill Development costs Patents 160 Machine 80 Land 550 The company could sell the CGU for a price of € 800 m, the arising selling costs are to estimate at € 2 million in the current year. If one retains the CGU the management expects to generate in the next three years a net cash flow of € 250 million per year, the market interest is so low that a "0"-level can be supposed. Value in use cannot be ascertained for any of the assets, but fair value less costs to sell is € 545 million for the land. Describe the necessary evaluation process of the CGU including a calculation and the final correct values of the CGU-assets. (10 p.)
Expert Answer:
Related Book For
Applying International Financial Reporting Standards
ISBN: 978-0730302124
3rd edition
Authors: Keith Alfredson, Ken Leo, Ruth Picker, Paul Pacter, Jennie Radford Victoria Wise
Posted Date:
Students also viewed these accounting questions
-
A Cash Generating Unit (CGU) had the following assets on 1st January 2018: Goodwill K50, 000; Office block K250,000 depreciated over 10 years on a straight line basis; Machinery K550, 000 depreciated...
-
Leo plc has identified a cash generating unit that is composed of the following assets with the following book values: At the end of 2021 the cash generating unit has been subjected to an impairment...
-
A hydrofoil 50 cm long and 4 m wide moves at 28 kn in seawater at 20°C. Using flat-plate theory with Retr = 5E5, estimate its drag, in N, for (a) a smooth wall and (b) a rough wall, ε =...
-
CORPORATE FINANCE- RISK MANAGEMENT You manage a Swedish company that produces hats. You source your textiles mainly from Poland. The next input delivery from Poland is coming in three months. The...
-
Refer to the information in problem 20-44 for the Blue Water Yachts Company. In problem 20-44, Blue Water Yachts is a small company founded by two businesspeople who are friends and avid sailors. At...
-
A fishbone diagram can link causes with effects. A. True B. False
-
A particle that has mass \(m\) and charge \(q\) enters a uniform magnetic field that has magnitude \(B\) and is directed along the \(x\) axis. The initial velocity of the particle is in the \(x y\)...
-
Janice Kerry is the management accountant at the can manufacturing plant of United Packaging. She looked a little puzzled as she stared at the regression equation for estimating the relationship...
-
Answer the question by showing the calculation procedure. Verified the answer by using the MATLAB coding. Submit all the answers (calculation procedure & MATLAB code) to MS Team. For all of the...
-
The bookkeeper has prepared a preliminary trial balance of Suzzy and Daryl for the year ended 31 December as follows. GH Capital account Profit and loss account at 1 January Bank loan Debtors and...
-
What are threats to inventory within the production cycle (both threats to physical inventory and the data related to inventory)? What specific controls do AIS offer to help prevent or at least...
-
Choosing the no change strategy and thereby recommending that the current strategy be continued is the least risky option. True of False
-
Another name for an opportunity is an alternative. True of False
-
A factor can be both an opportunity and a strength. True of False
-
Opportunities and threats should emanate from the analysis of macroenvironmental and industry forces. True of False
-
The value chain is an analytical technique for identifying organizational opportunities and threats. True of False
-
What are companies approach to sustainability for Qantas airlines and also give recommendations to improve it. What is the sustainability that are substantiated by learned concepts or research? for...
-
Before the 1973 oil embargo and subsequent increases in the price of crude oil, gasoline usage in the United States had grown at a seasonally adjusted rate of 0.57 percent per month, with a standard...
-
A company announces a final dividend at the end of the financial year. Discuss whether a dividend payable should be recognised.
-
Identify the potential benefits of a globally accepted set of accounting standards.
-
Explain why key management personnel are regarded as related parties.
-
A gene is a segment of DNA that contains the information to produce a functional product. The functional product of most genes is a. DNA. b. mRNA. c. a polypeptide. d. none of the above.
-
Which of the following is not a constituent of a cells proteome? a. An enzyme b. A cytoskeletal protein c. A transport protein in the plasma membrane d. An mRNA
-
The direct result of the process of transcription is the synthesis of a. DNA. b. RNA. c. a polypeptide. d. all of the above.
Study smarter with the SolutionInn App