Cash-generating unit, goodwill and corporate assets

Context

The Nordal group (a fictitious group) acquired 80% of Solaris Ibérica, which installs and operates solar power plants, on 1 January 20X2. Non-controlling interests were measured at their proportionate share of identifiable net assets (IFRS 3 option, given); the goodwill recognised, measured under IFRS 3, amounts to 480,000 (given). The 20X2 annual test showed no loss. You are preparing the test at 31 December 20X3 and the note to the consolidated financial statements.

Assignment

Workpaper Cash-generating unit, goodwill and corporate assets.

Purpose of the workpaper

Identify the unit tested, allocate its share of corporate assets, determine its carrying amount (goodwill notionally grossed up when non-controlling interests are measured at their share of net assets), compare it with the recoverable amount, allocate the loss first to goodwill and then pro rata to the other assets subject to their floor, and recognise only the share relating to the recognised goodwill.

Questions of the file covered by this workpaper

• Calculate the notional goodwill and the carrying amount of the unit to be compared with its recoverable amount.
• Calculate the loss of the unit, its allocation and the loss to be recognised.
• Which entry do you record at 31 December 20X3?

• ContractAcquisition agreementOpen
• MinutesMinutes of the executive committeeOpen
• ScheduleCarrying amounts of the Solaris unitOpen
• DocumentValuation reportOpen
• ExtractShare priceOpen