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Chapter 5

6.2 Summary of recognition and measurement

Recoverable amount
=
higher of:

– Value in use
– Fair value less costs to sell

If carrying amount > CGU is the smallest
recoverable amount then group of assets that
write down assets generates cash flows

Normally charge For cash generating units
to P/L (CGU) allocate impairment
firstly to goodwill then to
other assets in proportion to
carrying amount

Charge to OCI to
extent
revaluation An asset can’t be Impairment can
reserve exists. reduced below its be reversed
recoverable (except for
Excess to P/L amount goodwill)

Illustrations and further practice

Now try TYUs 4 – 8 from Chapter 5.

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