Tuesday, April 30, 2019

Advanced Accounting Term Paper Example | Topics and Well Written Essays - 1250 words

locomote Accounting - Term Paper ExampleThe above lists are not intended to be exhaustive. Further, an indicator that an asset may be impaired may be indicated by the assets reclaimable life, depreciation method, or residual value, which may need to be reviewed and adjusted. If gracility relates to a cash-generating unit, the entity must calculate wrong of the goodwill. IAS 36 provides for bottom-up and top-down footraces for identifying impaired goodwill. If a CGU is being tested for impairment, and there is every goodwill in the financial statements relating to that CGU, a bottom-up test is performed. This requires the enterprise to determine whether the carrying amount of the goodwill can be allocated on a reasonable and consistent basis to the CGU under review. If such an allotment is possible (for example, if the goodwill relates entirely to an acquisition that is 100% included in the CGU), the portion of goodwill tie in to the CGU is simply included in the carrying amo unt of the CGU for impairment testing purposes. No further top-down test is required. If goodwill cannot be allocated to the CGU, the carrying amount of the CGU (excluding any allocation of goodwill) is compared to its recoverable amount to ensure that any impairment of the assets included in the CGU other than goodwill is identified. Since goodwill is not included in this assessment, a top-down test is then undertaken. This requires the enterprise to identify the smallest CGU under review and to which the amount of goodwill can be allocated on a reasonable and consistent basis.

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