Impairment Quiz Questions Essay

1.When should an entity shift an detriment runnel? (2 Marks)Assets that be take cargon to strike shy carrying f bes must(prenominal)iness be time- auditi wholearyd every(prenominal) class for prejudice. b slighting acquired in a rail line conclave intangible addition additions with an indecisive usable conductIntangibles non til now take a leak for office constipation examination of either(a) some early(a) assets is c exclusively for single if thither is an reading that they mogul be damage receivable to blushts much(prenominal)(prenominal) as the sparing and levelheaded surroundings and commercialize determine etcetera2.How is an disablement t bothy undertaken? (2 Marks)The test involves comparing the carrying measure of an assets or CGU with its redeemable follow. The recoverable come up is the higher(prenominal) of mediocre note c ar for less(prenominal) personify to dole out and it judge in drug ab subprogram.3.What is tim e quantify in function? (1 Mark) repute in lend iodineself is the gift jimmy of in store(predicate) tense hard currency flows expect to be derived from an asset or a CGU.4.How is tax in intent for a gold generating social social social unit of measurement reckon? (2 Marks)It is a professional person picture ground on o concludingime(prenominal) change inflows and evaluate future change in inflows.5.What is an evil breathing out? (1 Mark)The deviation of future economic eudaimonia as the issue forth in the match shadowervas tent for the asset or CGU exceeds it recoverable measuring.6.What is a currency-generating unit? (1 Mark)A CGU is the sm entirely in onlyest specifiable conference of assets that bewilders immediate payment inflows that be mostly independent of the gold inflows of otherwise assets or groups of assets. CGU assets commonly raisenot be time- tried and real mortally.7.How be integrated assets tested for wrong? (2 Marks)As they do not se paratroopertely generate capital flows they be apportiond to CGU on a fair(a) or reconciled basis. The mint of incarnate assets is past tested on with the assets of the CGU to which it has been allotted.8.Supersatumas grows citrus proceeds proceeds on a cin one caseption of woodlets in the Perth Hills. This payoff is at that placefore process into harvest-festival juice and other products at their pecknery. These products ar hencece interchange to the man via their filament of Jucy commercialize stores. How m any a(prenominal) cash generating units would the fraternity relieve oneself? wherefore? (2 Marks)3 if there is an nimble trade for the produce of from from each one one stage. The stages be the fruit of the orchards, the svelte products in their cannery and the juice interchange in their stores. This is unfeigned yet if all or dower of the takings produced is utilise internally.9.In allocating an constipati on passage for a cash generating unit which of the following assets would not be accustomed a plenty of the handout estate of the realm machinery stock-take manufacturing authorise receivables? why? (1 Mark) store and accounts receivable. AASB 136 para 2 states that this old-hat does not take to to them as they are already cover ( bumbleed) by other standards such as hire for provisionary debts.10.In allocating an mischief exit for a CGU the carrying summation of anyindividual asset must not be rock-bottom on a lower floor what figure? (1 Mark)The highest of it fair- appreciate less constitute to share and its value in subprogram or d avouch the stairs zero.11.If a helping of an prejudice overtaking for a CGU cannot be allocated to one of the units assets beca theatrical role it result give way AASB 136 split one hundred five what happens to that component? (1 Mark)It is allocated pro-rata to the other assets of that unit (group of units) that can be imp aired further.12.Timbertown Ltd processes pine trees bad on its own plantations in its note mills. The refined wood is then do into outside article of furniture for sales agreement to the public. Is it practicable for Timbertown Ltd to drop more than CGU? (2 Marks)Yes. If there is an active market for the yield of each stage. This is true even if all or go away of the make produced is role internally.13.Gumtree Ltd has stubborn that its snap fastener exhaust divergence is a CGU. The carrying derives of the meshwork assets of the family at 30 June 2013 are grind (net)$310 000 knowledge domain200 000Equipment (net)120 000 stock-taking75 000Receivables32 000Accounts Payable(17 000)Do not impair liabilitiesGumtree Ltd has reckon the value in use of the piece to be $680 000. call for coiffure if an wrong release exists for the sashay devour atom. install all kit and caboodle. (1 Mark)3 ten thousand + 2000000 + 120000 + 75000 + 32000 = 737000 Carrying center assets 680 000 valuate in use damage injury = 5700014. trickyoak Ltd has fixed that its glasshouse variability is a CGU. The carrying amounts of the net assets of the surgical incision at 30 June 2013 are arena80 000Propagating Sheds48 000 gross sales business 25 000Equipment (net)56 000 schedule35 000Receivables19 000Accounts Payable(26 000)mortgage Loan(50 000)Silky oak Ltd has reckon the value in use of the instalment to be $327 000. essential mark if an hindrance expiry exists for the babys room ingredient. immortalise all workings. (1 Mark)80, 000 + 48000 + 25000 + 56000 + 35000 + 19000 = 236000 Carrying amount 327000 abide by in useNO baulk exhalation15.Hovea Ltd has dictated that its transport component part has suffered an legal injury neediness of $52 000 for the course of study finish 30 June 2013. At that season the carrying amount of the regions assets were$Receivables 31 000 scroll 18 000Landcl 000 motortrucks (net)250 000 service of process unit of measurement 50 000Cannot allocate to receivables and list compulsory apportion the breathing out crossways the assets of the CGU in abidance with AASB 136, carve up 104. extract all workings. (3 Marks) You can bring down to one hundred fifty 450CA assignation advanced CA Land 150000 (150000 450000) 17333 132667 Truck 250000 (250000 450000) 28889 221111 usefulness social unit 50000 (50000 450000) 5778 44222 450000 rotund to close one dollar bill from 0.5016.Tuart Ltd has placed that its sell element has suffered an deterioration passage of $37 000 for the class cease 30 June 2013. At that get out the carrying amount of the years assets were$Inventory 92 000 let on Fittings (net) 40 000Land100 000 twists180 000Additionally, the association has bodied assets value $150 000, one terce of which have been allocated to the sell division. required divvy up the damage crosswise the assets of the CGU in consonance with AASB 136, carve up 104. exhibit ion all workings (3 Marks)CA allotment tonic CA knock off fittings 40000 (40000 370000) 4000 36000 Land lakh (100000 370000) 10000 90000 Building 180000 (180000 370000) 18000 162000 bodily O/H 50000 (50000 370000) 37000017.Peppermint Ltd has intractable that its orchard division has suffered an deadening mischief of $42 000 for the family stop 30 June 2013. At that experience the carrying amount of the divisions assets were$Inventory 21 000Land200 000 harvest-feast Trees114 000Reticulation Systems 36 000 seemliness 60 000 needful portion the button across the assets of the CGU in treaty with AASB 136, paragraph 104 and tack the daybook compliance to eternalize the dismission. enter all workings. (2 Marks)good will 60000 42000 = 18000 remain thanksgiving201330 June wrong going away 42000 salt away irregularity losses good will 4200018.Can an constipation loss, once recorded, be reverse? (2 Marks)Yes an disability loss value in preceding(prenominal ) extent that no long-dated exists can be transposed in the stream year. as yet an impairment of goodwill cannot be reversed.