Chapter 19 Problem 19-24
1. Total carrying amount 5,000,000
Value in use 3,600,000
Impairment loss 1,400,000
2. Impairment loss allocated to goodwill 500,000
Impairment loss allocated to the other assets 900,000
1,400,000
When an impairment loss is recognized for a cash generating unit, the loss is
allocated to the assets of the unit in the following order:
a. First, to the goodwill, if any.
b. Then, to all other assets of the unit prorata based on their carrying amount.
Carrying amount Fraction Loss
Building 2,000,000 20/45 400,000
Inventory 1,500,000 15/45 300,000
Trademark 1,000,000 10/45 200,000
4,500,000 900,000
3. Impairment loss 1,400,000
Goodwill 500,000
Accumulated depreciation – building 400,000
Inventory 300,000
Trademark 200,000
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