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. First to goodwill, then to other assets pro-rata based on carrying amounts
C. Equally to all tangible assets, ignoring intangible assets
D. First to other assets, then to goodwill
Answer: Option B
Solution (By JKSSB Mock Tests)
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!