recoverable amount of this cash-generating unit is $130 000 at 31 December 2014. The carrying amount of the cash-generating unit is $181 000 at 31 December 2014, constituted by the following individual carrying amounts as at this date: Goodwill (purchased goodwill): 20 000 Equipment (measured under the cost model): 60 000 Investment property (measured under the cost s1 000 model: Inventory 20 000 The recoverable amounts at 31 December 2014 for the goodwill and investment property could not be estimated on individual basis, but the recoverable amount for equipment was estimated to be $40 000. In accordance with IAS 2 the realizable value of the inventory was $15 000. %24

recoverable amount of this cash-generating unit is $130 000 at 31 December 2014. The carrying amount of the cash-generating unit is $181 000 at 31 December 2014, constituted by the following individual carrying amounts as at this date: Goodwill (purchased goodwill): 20 000 Equipment (measured under the cost model): 60 000 Investment property (measured under the cost s1 000 model: Inventory 20 000 The recoverable amounts at 31 December 2014 for the goodwill and investment property could not be estimated on individual basis, but the recoverable amount for equipment was estimated to be $40 000. In accordance with IAS 2 the realizable value of the inventory was $15 000. %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At 30 June 2020, White Ltd reported the following cash-generating unit, with the carrying amount totaling $530,000: Land 200,000 Equipment 600,000 Accumulated depreciation - Equipment (300,000) Goodwill 30,000 All items of property, plant and equipment are measured using the cost model. At 30 June 2020, the recoverable amount of the cash-generating unit was $480,000. For the period ending 30 June 2021, the depreciation charge on the equipment was $38,000. If the equipment had not been impaired the charge would have been $41,000. At 30 June 2021, the recoverable amount of the unit was calculated to be $15,000 greater than the carrying amount of the assets of the unit. As a result, White Ltd recognized a reversal of the previous year’s impairment loss. Required: Prepare the journal entries relating to impairment at 30 June 2020 and impairment reversal at 30 June 2021. And you are required to show all workings for allocation of impairment (and reversa
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