In the context of AS 28 (Impairment of Assets), if a Cash Generating Unit (CGU) is impaired, the impairment loss is allocated to reduce the carrying amount of assets in what order?
A.Pro-rata based on carrying amounts of all assets
B.Equally to all tangible assets, ignoring intangible assets
C.First to other assets, then to goodwill
D.First to goodwill, then to other assets pro-rata based on carrying amounts
Explanation:
AS 28 dictates that an impairment loss for a CGU must first reduce the carrying amount of any goodwill allocated to the CGU, and then to the other assets pro-rata based on their carrying amounts.
No comments yet. Be the first to start the discussion!