Ernon plc has identified an indicated of impairment and is conducting an impairment review. Its summarised balance sheet at 31 March 2014 is as follows: Goodwill £600 Property £820 Plant and equipment £730 Net current assets £265 £2415 Share capital and reserves £2415 The whole of the company is considered to be a single cash generating unit (CGU). The net current assets have been valued at the lower of cost and net realisable value, and the net realisable value of the property is £900,000. The plant and equipment is estimated to have a sale value of £115,000. The value in use of the whole company is estimated to be £1.4 million. Required Calculate whether an impairment loss has occurred and, if so, prepare a revised balance sheet for Ernon plc 31 March 2014. Explain your workings fully.
Please answer correct with good presentation using commas and dollar sign in each figure
Ernon plc has identified an indicated of impairment and is conducting an impairment review. Its summarised
Property £820
Plant and equipment £730
Net current assets £265
£2415
Share capital and reserves £2415
The whole of the company is considered to be a single cash generating unit (CGU). The net current assets have been valued at the lower of cost and net realisable value, and the net realisable value of the property is £900,000. The plant and equipment is estimated to have a sale value of £115,000. The value in use of the whole company is estimated to be £1.4 million.
Required
Calculate whether an impairment loss has occurred and, if so, prepare a revised balance sheet for Ernon plc 31 March 2014. Explain your workings fully.
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