North Ltd produces a single product and owns boiler plants A, B and C. Each boiler plant is located on a different continent. A produces a component that is assembled in either B or C. The combined capacity of B and C is not fully utilized. North’s products are sold worldwide from either B or C. For example B ‘s production can be on C’s continent if the products can be delivered faster from B than from C. Utilisation levels of B and C depend on allocation of sales between the two sites. Case 1 There is an active market for A’s products Case 2 There is no active market for A’s products REQUIRED TO; 1. For each case identify Cash generating units for A,B and C. 2. List the indicators considered in assessing whether assets are likely to be impaired
QUESTION
North Ltd produces a single product and owns boiler plants A, B and C. Each boiler plant is located on a different continent. A produces a component that is assembled in either B or C. The combined capacity of
B and C is not fully utilized. North’s products are sold worldwide from either B or C. For example B ‘s production can be on C’s continent if the products can be delivered faster from B than from C. Utilisation levels of B and C depend on allocation of sales between the two sites.
Case 1
There is an active market for A’s products
Case 2
There is no active market for A’s products
REQUIRED TO;
1.
For each case identify Cash generating units for A,B and C.
2.
List the indicators considered in assessing whether assets are likely to be impaired.
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