During 20X5, new water analysis in Alandia resort owned by Beautiful Spas showcd that water was no longer contaminated. To improve its reputation, Beautiful Spas (subsidiary of Swimmers) launched massive advertising campaign and as a result, number of customers significantly increased in comparison with the year 20X3 and 20X4. Based on these facts and as a part of an impainment testing, management prepared new cash flow projections for Alandia resort. Based on financial data shown below, advice Swimmers Corp. how to deal with this situation in group accounts for the year ended 31 December 20X5. Financial data: as of 31 Dec 20X3 in EUR "O0 - from example on Business Combinations Accum depreciation before IL 1,300 750 Impairiment loss in 20X3 Carrying Asset Historical cost amount Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE 7,851 4,529 3,926 2,416 1,510 13,000 3,849 7,500 6,500 2.221 1,924 650 4,000 2,500 400 1,184 250 740 500 34,000 6,000 40,000 100 3,450 132 10,050 6,000 16,050 268 Subtotal 20,500 Goodwill Total 3450 20,500 as of 31 Dec 20X5 in EUR '000 Carrying amount As would be had no IL Asset As shown been recognized in 20х3 Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE Subtotal Goodwill Total 6,280 9,360 3,624 3,140 5,400 1,932 1,207 4,680 2,880 1,800 215 320 16,398 24,440 6,000 30,440 16,398 Value in use based on managers' projections as of 31 Dec 20X5: Fair value less cost to sell based on recent offer: 32,000 28,000
During 20X5, new water analysis in Alandia resort owned by Beautiful Spas showcd that water was no longer contaminated. To improve its reputation, Beautiful Spas (subsidiary of Swimmers) launched massive advertising campaign and as a result, number of customers significantly increased in comparison with the year 20X3 and 20X4. Based on these facts and as a part of an impainment testing, management prepared new cash flow projections for Alandia resort. Based on financial data shown below, advice Swimmers Corp. how to deal with this situation in group accounts for the year ended 31 December 20X5. Financial data: as of 31 Dec 20X3 in EUR "O0 - from example on Business Combinations Accum depreciation before IL 1,300 750 Impairiment loss in 20X3 Carrying Asset Historical cost amount Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE 7,851 4,529 3,926 2,416 1,510 13,000 3,849 7,500 6,500 2.221 1,924 650 4,000 2,500 400 1,184 250 740 500 34,000 6,000 40,000 100 3,450 132 10,050 6,000 16,050 268 Subtotal 20,500 Goodwill Total 3450 20,500 as of 31 Dec 20X5 in EUR '000 Carrying amount As would be had no IL Asset As shown been recognized in 20х3 Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE Subtotal Goodwill Total 6,280 9,360 3,624 3,140 5,400 1,932 1,207 4,680 2,880 1,800 215 320 16,398 24,440 6,000 30,440 16,398 Value in use based on managers' projections as of 31 Dec 20X5: Fair value less cost to sell based on recent offer: 32,000 28,000
Chapter1: Financial Statements And Business Decisions
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