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

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Ex 3.7- Reversal
During 20X5, new water analysis in Alandia resort owncd 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
impairment 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 'D00 - from example on Business Combinations
Accum. depreciation
before IL.
Impairment
loss in 20X3
Cаrrying
Asset
Historical cost
amount
Healing springs with land
Source of healing mud
Spa facilities
Sport / leisure facilities
Administrative buildings
Other PPE
Subtotal
13,000
1,300
750
3,849
7,851
4,529
7,500
2,221
6,500
650
1,924
3,926
4,000
400
1,184
2,416
2,500
250
740
1,510
500
34,000
6,000
100
3,450
132
10,050
6,000
268
20,500
Goodwill
Total
40,000
3,450
16,050
20,500
as of 31 Dec 20X5 in EUR '000
Carrying amount
As would be had no IL
Asset
As shown
been recognized in
20X3
Healing springs with land
Source of healing mud
Spa facilities
Sport / leisure facilities
Administrative buildings
Other PPE
Subtotal
6,280
9,360
3,624
5,400
3,140
4,680
1,932
1,207
2,880
1,800
215
320
24,440
6,000
30,440
16,398
Goodwill
Total
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
Transcribed Image Text:Ex 3.7- Reversal During 20X5, new water analysis in Alandia resort owncd 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 impairment 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 'D00 - from example on Business Combinations Accum. depreciation before IL. Impairment loss in 20X3 Cаrrying Asset Historical cost amount Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE Subtotal 13,000 1,300 750 3,849 7,851 4,529 7,500 2,221 6,500 650 1,924 3,926 4,000 400 1,184 2,416 2,500 250 740 1,510 500 34,000 6,000 100 3,450 132 10,050 6,000 268 20,500 Goodwill Total 40,000 3,450 16,050 20,500 as of 31 Dec 20X5 in EUR '000 Carrying amount As would be had no IL Asset As shown been recognized in 20X3 Healing springs with land Source of healing mud Spa facilities Sport / leisure facilities Administrative buildings Other PPE Subtotal 6,280 9,360 3,624 5,400 3,140 4,680 1,932 1,207 2,880 1,800 215 320 24,440 6,000 30,440 16,398 Goodwill Total 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
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