Economics · Financial Accounting
Crown Co. operates a production line considered a cash-generating unit (CGU). Due to a significant decline in demand, an impairment review was conducted on December 31, 20X4. Prior to impairment, the carrying amounts were: Goodwill $150,000; Specialized Plant $400,000; Patents (finite life) $100,000; Inventory (at NRV) $50,000; Trade Receivables (at NRV) $30,000. Total carrying amount is $730,000. The recoverable amount of the CGU is $600,000. The specialized plant has a fair value less costs to sell of $380,000 and a value in use of $390,000. According to IAS 36, what is the carrying amount of the Specialized Plant after allocating the impairment loss?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$350,000
- 2$390,000
- 3$400,000✓
- 4$380,000
Correct answer
$400,000
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