📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    A CGU comprises back-office software (finite life) and a

    customer list (indefinite life). Recoverable amount is below carrying amount due to regulatory pricing caps. How do you allocate impairment?
    A First to indefinite-life intangibles, then pro-rata Correct Answer Incorrect Answer
    B Pro-rata to all assets in CGU, excluding goodwill Correct Answer Incorrect Answer
    C First to goodwill; residual pro-rata Correct Answer Incorrect Answer
    D Pro-rata to all assets except those with specific recoverable amounts > carrying Correct Answer Incorrect Answer
    E Only to depreciable assets Correct Answer Incorrect Answer

    Solution

    Impairment is allocated to assets in CGU except those constrained (e.g., cannot be reduced below recoverable amount or fair value less costs of disposal).

    Practice Next
    More Accounts Questions
    ask-question