At reporting date,the carrying amount of a cash-generating unit was considered to be have been impaired by $1000.The unit included the following assets: land $5000; plant $4000; and goodwill $1250.The carrying amount of goodwill after the allocation of the impairment loss is:
A)$0.
B)$250.
C)$3000.
D)$4000.

Question

Quizplus · Accepted Answer

To allocate the impairment loss among assets, the recoverable amount (higher of fair value less costs to sell and value in use) of each asset in the cash-generating unit needs to be determined. The carrying amount of the land and plant are not mentioned in the question, so we cannot determine if they have also been impaired. However, the carrying amount of goodwill needs to be reduced by the impairment loss allocated to it. Therefore, the carrying amount of goodwill after the allocation of the impairment loss is $1250 - $1000 = $250.

At Reporting Date,the Carrying Amount of a Cash-Generating Unit Was