Scribd
Upload
3 views1 page

Additional Practice Question

An entity in East London conducted an impairment review of a cash-generating unit (CGU) on 31 December 2022, resulting in a total impairment of R220,000, primarily affecting goodwill and property, plant, and equipment. By 31 December 2023, the recoverable amount of the CGU improved to R420,000, indicating a reversal of impairment indicators. The document requires an explanation and calculations regarding the impact of this impairment reversal in accordance with IAS 36 Impairment of Assets.

Uploaded by

Aphelele
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
3 views1 page

Additional Practice Question

An entity in East London conducted an impairment review of a cash-generating unit (CGU) on 31 December 2022, resulting in a total impairment of R220,000, primarily affecting goodwill and property, plant, and equipment. By 31 December 2023, the recoverable amount of the CGU improved to R420,000, indicating a reversal of impairment indicators. The document requires an explanation and calculations regarding the impact of this impairment reversal in accordance with IAS 36 Impairment of Assets.

Uploaded by

Aphelele
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

An entity operating in East London performed an impairment review of a cash-generating

unit (CGU) at 31 December 2022.

Results of impairment test (R’000):

Carrying amount pre- Carrying amount post-


Asset Impairment
impairment impairment
Goodwill 100 (100) 0
Property, plant and
300 (120) 180
equipment
Total CGU 400 (220) 180

The Property, plant and equipment (PPE) originally cost R400,000 on 1 January 2021. The
useful life of the asset is 8 years, and there is no residual value. On 31 December 2023,
conditions improved, and impairment indicators reversed. The Recoverable amount of CGU
on 31 December 2023 was R420,000

Required:

Explain, with calculations, the impact of the impairment reversal for the year ended 31
December 2023, in accordance with IAS 36 Impairment of Assets.

You might also like