Reference no: EM133026259

Question -

a. Lacey Limited expected future cash flows from the use of plant as follows: End of Year 1 $14 000; End of Year 2 $15 000; End of Year 3 $12 000. The discount rate was determined as 9%. What is the value in use of the plant?

b. Parkes Limited recognised an impairment loss of $20 000 against a cash-generating unit containing the following assets: buildings $50 000; roads $110 000; equipment $40 000. What is the net carrying amount of the roads after allocation of the impairment loss?

c. Berry Pty Ltd has two cash generating units. CGU A had a carrying amount of $1700 and value in use of $1750. CGU B has a carrying amount of $1900 and a value in use of $1800. The carrying amount of the head office assets is $1400. CGU A and B utilise the head office services equally. What is the impairment loss for CGU A?

d. During 2021, Simpson Limited estimated that the carrying amount of goodwill was impaired by $20 000. In 2022, the company reassessed goodwill and determined that the goodwill initially acquired still existed. What is the appropriate accounting treatment in 2022? Explain.

e. What are some external indicators of impairment?

f. What are some internal indicators of impairment?

g. What is meant by recoverable amount?