Blue Oak Investments owns a retail business which has suffered badly during the recession. Blue Oak Investments treats this business as a separate cash generating unit.The carrying amounts of the assets comprising the retail business are: $’000Building900Plant and equipment300Inventory70Other current assets130Goodwill40An impairment review has been carried out as at 31 December 20X9 and the recoverable amount of the cash generating unit is estimated at $1.3m.RequiredRestate the carrying amounts of the assets of the retail business after accounting for the result of the impairment review.

The exact meaning of an impairment loss seems to be a drop in an underlying asset net carrying value…

Answered: Blue Oak Investments owns a retail…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Blue Oak Investments owns a retail business which has suffered badly during the recession. Blue Oak Investments treats this business as a separate cash generating unit.

The carrying amounts of the assets comprising the retail business are:

	$’000
Building	900
Plant and equipment	300
Inventory	70
Other current assets	130
Goodwill	40

An impairment review has been carried out as at 31 December 20X9 and the recoverable amount of the cash generating unit is estimated at $1.3m.

Required

Restate the carrying amounts of the assets of the retail business after accounting for the result of the impairment review.

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