Example 5: Impairment (Cash Generating Unit- CGU) There was an explosion in factory. The carrying amount of its assets were as follows: Assets ,000 Goodwill 100 Patents 200 Machines 300 Computers 500 Buildings 1,500 2,600 Factory operated as CGU. Impairment review reveals that net selling price of a factory is 1.2m and value in use is 1.95m. Half of machines were blown to pieces and but other half can be sold for at least their book value. The patents have been superseded and considered worthless now.

Question:

Requirement: How should the impairment loss be allocated to the assets?

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