Chapter 19 Problem 19-29
The primary purpose of the building is to serve as a corporate asset supporting Litmus Company’s manufacturing operations. Therefore, the building in itself cannot be considered to generate cash inflows that are largely independent of the cash inflows from the entity as a whole. In this case, the cash generating unit is Litmus Company as a whole.
The building is not held for investment. Thus, it is not appropriate to determine the value in use of the building based on the cash inflows of related rent.
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