Parent acquires an 80% ownership interest in Subsidiary for 2,100 on 1st April, 20X1. At that date, Subsidiary's net identifiable assets have a fair value of 1,500. Parent chooses to measure the non-controlling interests as the proportionate interest of Subsidiary's net identifiable assets. The assets of Subsidiary together are the smallest group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Since other cash-generating units of Parent are expected to benefit from the synergies of the combination, the goodwill of 500 related to those synergies has been allocated to other cash-generating units within Parent. On 31st March, 20X2, Parent determines that the recoverable amount of cash-generating unit Subsidiary is 1,000. The carrying amount of the net assets of Subsidiary, excluding goodwill, is 1,350. Allocate the impairment loss on 31st March, 20X2.

Parent acquires an 80% ownership interest in Subsidiary for 2,100 on 1st April, 20X1. At that date, Subsidiary's net identifiable assets have a fair value of 1,500. Parent chooses to measure the non-controlling interests as the proportionate interest of Subsidiary's net identifiable assets. The assets of Subsidiary together are the smallest group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Since other cash-generating units of Parent are expected to benefit from the synergies of the combination, the goodwill of 500 related to those synergies has been allocated to other cash-generating units within Parent. On 31st March, 20X2, Parent determines that the recoverable amount of cash-generating unit Subsidiary is 1,000. The carrying amount of the net assets of Subsidiary, excluding goodwill, is 1,350. Allocate the impairment loss on 31st March, 20X2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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