How do SMEs account for impairment losses on CGUs? a. The impairment loss is charged first to goodwill and any excess is allocated to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU. b. The impairment loss is allocated only to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU because an SME shall not recognize any goodwill. c. There is no accounting for impairment losses on CGUs because an SME needs only to account for individual assets rather than groups of assets such as CGUs. d. b and c.
How do SMEs account for impairment losses on CGUs? a. The impairment loss is charged first to goodwill and any excess is allocated to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU. b. The impairment loss is allocated only to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU because an SME shall not recognize any goodwill. c. There is no accounting for impairment losses on CGUs because an SME needs only to account for individual assets rather than groups of assets such as CGUs. d. b and c.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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8. How do SMEs account for impairment losses on CGUs?
a. The impairment loss is charged first to goodwill and any excess is allocated to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU.
b. The impairment loss is allocated only to the other assets of the CGU pro rata on the basis of the carrying amount of each asset in the CGU because an SME shall not recognize any goodwill.
c. There is no accounting for impairment losses on CGUs because an SME needs only to account for individual assets rather than groups of assets such as CGUs.
d. b and c.
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