3. (a) IAS 36 Impairment of Assets provides accounting guidance for the impairment of non-current assets. Requirement: Explain what a cash-generating unit (CGU) is and how an impairment loss in a CGU should be accounted for in accordance with IAS 36.< (b) The carrying amounts of the assets of a cash-generating unit (CGU) are as follows: Goodwill Patents and copyrights Property, plant and equipment< 2 £000 50,000 50,000 150,000 250,000 E J o There is evidence to indicate that the CGU is impaired. The recoverable amount of the CGU is £180,000. The fair value less costs of disposal for the patents and copyrights is estimated at £35,000 and the fair value less costs of disposal for the property, plant and equipment is estimated at £140,000. < Requirement: Calculate the amount of the impairment loss and explain how this should be allocated between the assets of the CGU.< (c) Explain how IFRS 13 Fair Value Measurement establishes a fair value hierarchy to categorise inputs used to measure fair value.

Consolidated Balance Sheet Working Paper, Identifiable Intangibles International Auto (IA) acquires all of the stock of Genuine Parts (GP) and reports the acquisition as a stock investment on its own books. The acquisition involves the following payments. All amounts are in thousands. Cash paid to GP shareholders $10,000 2,400 Cash paid to consultants and lawyers Fair value of new IA stock issued, 1,000 shares, $4 par 72,000 1,800 500 Stock registration fees, paid in cash Fair value of earnings contingency The earnings contingency, if paid, will occur three years subsequent to the acquisition. The balance sheet accounts of GP and IA, just prior to the acquisition, are as follows: International Auto (in thousands) Current assets Fixed assets, net Trademarks Current liabilities Long-term liabilities Common stock, par value Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock Total Book Value Dr (Cr) $60,000 840,000 178,000 (50,000) (700,000)…

AASB 116 requires disclosure of the following by asset class: I II III IV The useful lives of assets Yes No Yes Yes Accumulated impairment losses No Yes Yes Yes Items pledged as security Yes Yes No Yes Additions during the year Yes Yes Yes No ΟΙ O IV. O III Oll

Intangible assets on the balance sheet are subject to: Depreciation Amortization O None of the Above