IAS 36 raises a number of other issues that need to be considered in accounting for the impairment of goodwill within a cash-generating unit:-Disposal of an operation within a cash-generating unit= Where the cash-generating unit has a number of distinct operations and goodwill has been allocated to the unit, if one of the operations is disposed of, it is necessary to consider
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whether any of the goodwill relates to the operation disposed of. If so, the amount of goodwill is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained, unless the entity can demonstrate that some other method better reflects the goodwill associated with the operation disposed of. In calculating the gain or loss on disposal of the operation, the allocated portion of the goodwill is included in the carrying amount of the assets sold.E.g.: If part of a cash-generating unit was sold for $200 and the recoverable amount of the remaining part of the unit is $600, then it is assumed that 25% (200/[200 + 600]) of the goodwill has been sold and is included in the carrying amount of the operation disposed of.-Reorganization of the entity= Where an entity containing a number of cash-generating units restructures, changing the composition of the cash-generating units, and where goodwill has been allocated to the original units, paragraph 87 requires the reallocation of the goodwill to the new units. The allocation is done on a relative value basis similar to that used where a cash-generating unit isdisposed of, again unless the entity can demonstrate that some other method better reflects the goodwill associated with the operation disposed of.15.6 Reverse of an impairment loss.It’s possible for circumstances to change such that, when the recoverable amount of the assets increases, consideration can be given to a reversal of a past impairment loss. IAS 36 requires an entityto assess at the end of each reporting period whether there are indications that an impairment loss recognised in previous periods may not exist or may have decreased. If such indications exist, the entity should estimate the recoverable amount of the asset or unit.If there’s evidence of a favourable change in the estimates in relation to an asset (and only if there has been a change in the estimates) reversal of impairment loss.The ability to recognise a reversal of an impairment loss and the accounting for that reversal depend on whether the reversal relates to an individual asset, a cash-generating unit or goodwill.15.6.1 Reversal of an impairment loss – individual asset.If the recoverable amount > carrying amount of an individual asset (other than goodwill), the reversalof a previous impairment loss requires; adjusting the carrying amount of the asset to recoverable amount.
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