Homework answers / question archive /  a) The carrying amounts of the assets of a cash-generating unit are as follows: GH&m Goodwill 25 Patents and copyrights 50 Property, plant and equipment 200 There are indications that this CGU is impaired and therefore its recoverable amount has been determined

 a) The carrying amounts of the assets of a cash-generating unit are as follows: GH&m Goodwill 25 Patents and copyrights 50 Property, plant and equipment 200 There are indications that this CGU is impaired and therefore its recoverable amount has been determined

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 a) The carrying amounts of the assets of a cash-generating unit are as follows: GH&m Goodwill 25 Patents and copyrights 50 Property, plant and equipment 200 There are indications that this CGU is impaired and therefore its recoverable amount has been determined. The CGU's recoverable amount is GH 195 million. Value in use cannot be ascertained for any of the assets, but fair value less costs of disposal is GH 20 million for the patents and copyrights and GHe 160 million for the property, plant and equipment. Required: i. ii. State how frequently assets should be tested for impairment. (6marks) Calculate the amount of the impairment loss and show how this should be allocated between the assets of the CGU. (7marks) b) Selashie Davido Ltd purchases motorcycles from various countries and exports them to Mali. The entity has incurred these expenses during 2021: Page 7 of 13 Cost of purchases (based on vendors' invoices) Trade discounts on purchases Import duties Freight and insurance on purchases Other handling costs relating to imports Salaries of accounting department Brokerage commission payable to indenting agents for arranging imports Sales commission payable to sales agents After-sales warranty costs Required Selashie Davido Ltd. is seeking your advice on which costs are permitted under IAS 2 to be included in cost of inventory c) Kovey Agboado Kafui (KAK) Ltd. prepared its financial statements for the year ended 30 June 2021. During August 2021, before the financial statements were approved, the following issues arose: i. The company was informed that a customer had been declared bankrupt owing KAK Itd GH¢ 76.000. The debt related to sales in January 2021. ii. The directors discovered that an error in preparing the financial statements resulted in revenue being understated by GH€300,000, iii. A fire at one of the company's properties in July 2021 resulted in damage estimated at GH¢250,000. Required: What action should the directors take in respect of these issues, all of which are material?