Work Sheet $\_$ IAS $36$

An entity has purchased the whole of the share capital of another entity for a purchase

consideration of $$20$ million. The goodwill arising on the transaction was $$5$ million.

It was planned at the outset that the information systems would be merged in order to

create significant savings. Additionally, the entity was purchased because of its

market share in a particular jurisdiction and because of its research projects.

Subsequently the cost savings on the information system were made. The government

of the jurisdiction introduced a law that restricted the market share to below that

anticipated by the entity, and some research projects were abandoned because of lack

of funding.

Required:

Explain any potential indicators of the impairment of goodwill.

An entity is preparing its financial statements for the year ending November $30,2015.$

Certain items of plant and equipment were scrapped on January $1,2016.$ At

November $30,2015,$ these assets were being used in production by the entity and had

a carrying value of $$5$ million. The value$-$in$-$use of the asset at November $30,2015$

was deemed to be $$6$ million, and its fair value less costs to sell was thought to be

$$50,000($the scrap value$).$

Required:

What is the recoverable amount of the plant and equipment at November $30,2015?$

An entity is reviewing one of its business segment for impairment. The carrying value

of its net assets is $$20$ million. Management has produced two computations for the

value$-$in$-$use of the business segment. The first value $($ $$18$ million$)$ excludes the

benefit to be derived from fiuture reorganization, but the second value $($ $$22$ million$)$

includes the benefits to be derived from the future reorganization. There is no active

market for the sale of the business segments.

Required:

Explain whether the business segment is impaired.