How to record impairment of a cash-generating unit
Records the allocation of an impairment loss across the assets within a Cash-Generating Unit (CGU) under IAS 36.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Impairment Loss | Expense | 50,000.00 | - |
| Accumulated Impairment - Goodwill | Contra-Asset | - | 20,000.00 |
| Accumulated Impairment - PPE | Contra-Asset | - | 30,000.00 |
💡 Accountant's Note
Impairment is first applied to goodwill, then to other assets in the unit on a pro-rata basis based on carrying amounts.
Practitioner & Systems Framework
💻 ERP Architecture
Use the manual impairment transaction in the fixed asset module to allocate amounts to specific asset sub-numbers.
⚠️ Audit Flags
Failure to perform annual impairment tests for units containing goodwill or intangible assets with indefinite lives.
📄 Required Documentation
Discounted cash flow model, impairment testing worksheets, board approval of valuation assumptions.
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Expert Analysis by Qusai Ahmad
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Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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