Impairment of goodwill and CGUs

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  1. How should an impairment charge calculated for a CGU be allocated to the CGU`s individual assets?

  2. An entity acquired 70% of a subsidiary which is a CGU. At the year-end, the carrying amount of the subsidiary`s identifiable net assets is GBP 40 million; the recoverable amount of the CGU is GBP 61 million. Goodwill is GBP 21 million using the partial goodwill method. Calculate any impairment loss arising

  3. A acquired 75% of the equity of subsidiary (B). B became part of a larger CGU that includes another subsidiary (C) which is 100% owned by A. Goodwill of GBP 20 million arose on the acquisition of B and GBP 30 million on the acquisition of C. The carrying amount of the identifiable net assets of the combined CGU (B plus C) is GBP 80 million and the recoverable amount of the combined CGU is GBP 120 million. Using the full goodwill method, what would be the impairment loss suffered by the combined CGU?

  4. Under IFRS 3 Business Combinations, requirements have been introduced whereby entities can choose alternative methods of calculating goodwill. Which methods of calculating non controlling interest(NCI) are allowed under IFRS 3?

  5. When allocating the impairment loss to a CGU, the carrying amount of each asset within the CGU should not be reduced below the highest of: