a. Explain with examples 3 indications of impairment (6 marks) b. Zeta PLC has a number...
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a. Explain with examples 3 indications of impairment (6 marks) b. Zeta PLC has a number of cash generating units. One of which is being tested for impairment. The carrying amount of the CGU's assets as of the day of testing being carried out is £50 million. The value of the carrying amount of its liabilities £16 million. Information is provided to the effect that the CGU could be disposed of to a buyer for £30 million. The buyer would take over all of the CGU's assets and liabilities. Disposal expenses are negligible. The value in use of the CGU is estimated to be £48 million. This does not consider the future cash outflows relating to payment of the CGU's existing liabilities. Required a. Calculate the CGU's recoverable amount and carrying amount. (3 marks) b. Calculate the amount of any impairment loss. (3 marks) a. Explain with examples 3 indications of impairment (6 marks) b. Zeta PLC has a number of cash generating units. One of which is being tested for impairment. The carrying amount of the CGU's assets as of the day of testing being carried out is £50 million. The value of the carrying amount of its liabilities £16 million. Information is provided to the effect that the CGU could be disposed of to a buyer for £30 million. The buyer would take over all of the CGU's assets and liabilities. Disposal expenses are negligible. The value in use of the CGU is estimated to be £48 million. This does not consider the future cash outflows relating to payment of the CGU's existing liabilities. Required a. Calculate the CGU's recoverable amount and carrying amount. (3 marks) b. Calculate the amount of any impairment loss. (3 marks)
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Step 11 Solution Qus4aImpairment cost occurs when carrying amount of an asset exceeds its rec... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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