Unformatted text preview: . Hence, the tender for the package is based on the group of routes as a package. The lowest level of identifiable cash flows that are largely independent of the cash flows from other assets is the cash flows of the package of routes. The cash‐generating unit is then the package of routes. 23. Burger Queen
Each Burger Queen restaurant should be treated as a separate CGU as the cash flows are largely independent of the other stores. The only exception to this is advertising. Although the ingredients for making the burgers are supplied at a set cost, the amount of materials used is specific to an individual restaurant. Whether a specific restaurant remains in existence is based on an analysis of the performance of that restaurant – an analysis that is independent of the other restaurants. Internal management reporting would be organised to measure performance on a restaurant‐by‐
restaurant basis. The restaurants are in different neighbourhoods and probably have different customer bases. 3 Exercise 13.2 Impairment of loss, goodwill
FOXGLOVE LTD – BANKSIA LTD The carrying amount of the assets of the Toy Train Division is $500 000. If the value in use is $423 000, then there is an impairment loss of $77 000. The impairment loss is firstly used to write off the goodwill ‐ $50 000. The balance of the loss – $27 000 – is allocated across the other assets, except for inventory: Carrying Proportion Amount Factory 250 000 5/6 Brand 50 000 1/6 300 000 The journal entry...
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This homework help was uploaded on 04/04/2014 for the course ACCY 200 taught by Professor Kevin during the Three '12 term at University of Wollongong, Australia.
- Three '12
- Financial Accounting