Impairment for Corporate Office

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sowrudy
Posts: 69
Joined: 22 Feb 2022, 03:26

Impairment for Corporate Office

Post by sowrudy »

Hi Team

Just quick question about impairment.
As I understand, impairment is only conducted on CGU, as certain assets cannot generate cash by itself.
my question is on corporate office. When we identify the indication of impairment due to decline in economic activity, then we will test the impairment by putting together asset items (from the lowest level) to form CGU.

Just say if I run 2 hair saloons, and the running of the business is conducted under a corporate office (include HR, IT, Finance, etc) then my CGU would include:

CGU 1: Saloon in City 1........
- All chairs in the saloon
- equipment & appliance
- The shop
- corporate office???????

CGU 2: Saloon in City 2..........
- All chairs in the saloon
- equipment & appliance
- The shop
- corporate office???????

Question 1: do I need to include corporate office into above CGUs as corporate office is part of the component that allows the above CGU to generate cash.

Question 2: If so, then I would need to allocate the corporate office proportionally to each saloon. Just say the carrying amount of corporate office is 10, then each saloon get 5. Is that right

Warm regards
Sowrudy
JRSB
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Posts: 1344
Joined: 01 Mar 2020, 01:10
Location: UK

Re: Impairment for Corporate Office

Post by JRSB »

apportion corporate assets to CGUs on a reasonable and consistent basis
JRSB
Trusted Expert
Posts: 1344
Joined: 01 Mar 2020, 01:10
Location: UK

Re: Impairment for Corporate Office

Post by JRSB »

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