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Imparment Loss


Submitted By assidiqi
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1. When should an entity conduct an impairment test? (2 Marks)

2. How is an impairment test undertaken? (2 Marks)

3. What is ‘value in use’? (1 Mark)

4. How is value in use for a cash generating unit calculated? (2 Marks)

5. What is an impairment loss? (1 Mark)

6. What is a cash-generating unit? (1 Mark)

7. How are corporate assets tested for impairment? (2 Marks)

8. Supersatumas grows citrus fruit on a number of orchards in the Perth Hills. This fruit is then processed into fruit juice and other products at their cannery. These products are then sold to the public via their chain of Jucymarket stores. How many cash generating units would the company have? Why? (2 Marks)

9. In allocating an impairment loss for a cash generating unit which of the following assets would not be given a portion of the loss – land; machinery; inventory; manufacturing licence; receivables? Why? (1 Mark)

10. In allocating an impairment loss for a CGU the carrying amount of any individual asset must not be reduced below what figure? (1 Mark)

11. If a portion of an impairment loss for a CGU cannot be allocated to one of the unit’s assets because it will breach AASB 136 paragraph 105 what happens to that portion? (1 Mark)

12. Timbertown Ltd processes pine trees grown on its own plantations in its timber mills. The milled timber is then made into outdoor furniture for sale to the public. Is it possible for Timbertown Ltd to have more than CGU? (2 Marks)

13. Gumtree Ltd has determined that its picnic ware division is a CGU. The carrying amounts of the net assets of the division at 30 June 2013 are: Factory (net) $310 000 Land 200 000 Equipment (net) 120 000 Inventory 75 000 Receivables 32 000 Accounts Payable (17 000)

Gumtree Ltd has calculated the value in

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