Question

Accounting for impairment of cash generating unit

Answer 1

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An impairment loss of a cash-generating asset is the amount by which the carrying amount of an asset exceeds its recoverable amount. Non-cash-generating assets are assets other than cash-generating assets.

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Answer 2

Answer:

An impairment loss is recognized for a cash-generating unit where the recoverable amount of the unit is less than the carrying amount of the unit. The impairment loss is allocated to reduce the carrying amount of the assets of the unit on a pro rata basis, based on the carrying amount of each asset in the unit