Carrying Amount for Imparment

[sowrudy]

Hi Team

I have a question related to IAS 36 - goodwill impairment.
I tried to learn from some youtube videos on how to work out the carrying amount of a CGU (subsidiary) like below videos:

https://www.youtube.com/watch?v=NrCZtvYERrw
https://www.youtube.com/watch?v=1VZsQ7wOaWA

Seems from all the examples I got, the calculation of carrying amount, doesn't include liabilities. As I understood. Carrying amount is below.

Carrying amount of the CGU = Total assets of the CGU - Total liabilities of the CGU

Is that just a coincident that all the examples on youtube simply ignore liabilities to determine the carrying amount of a CGU (subsidiary)?

[JRSB]

https://ifrscommunity.com/knowledge-bas ... mpairment/

[JRSB]

you are testing assets, but there are cases such as deferred tax liabilities which need to be taken into account

[sowrudy]

Hi JRSB, So as I updated my understanding, the Carrying value of a CGU is basically the total assets of the subsidiary in question (not net assets which is net after liabilities)?

[JRSB]

IAS 36 defines a CGU as a 'group of assets' , not a group of 'net assets'. Remember the point of a CGU is because you can't test cash flows from a particular asset on its own (eg goodwill, or a head office building etc), so fundamentally its just trying to add assets together.
para 76 (B) - the carrying amount of a CGU does not include the carrying amount of any recognised liability unless the recoverable amount of the CGU cannot be determined without consideration of this liability.
the link above gives the example of a deferred tax liability and why it needs to be included.

[Marek Muc]

this section discusses this matter:
https://ifrscommunity.com/knowledge-bas ... cash-flows

so assets only with limited exceptions, but not all assets, just non-financial assets that are in the scope of IAS 36 (again, with limited exceptions )
https://ifrscommunity.com/knowledge-bas ... of-ias-36/