Disposal group file: loss, allocation, liabilities and presentation: Allocation — intangible assets

Context

Aquilon Industries SA (fictitious entity) closes its books on 31 December 20X6. On 30 June 20X6, it classifies its packaging division as held for sale (the criteria are met, case data); the division is sold in two lots before the closing date. The group must be measured, its loss allocated, the disposals recorded and the discontinued operation presented with its comparatives.

Assignment

Disposal group file

Purpose of the workpaper

For each group, list the assets remeasured under their own standard before classification and the liabilities, identify the assets within the measurement scope of the standard (any goodwill is entered separately) and enter the fair value of the group less costs to sell (datum of the file). The file computes the carrying amount of the group, the loss, its allocation (one instance per target asset) and the reversal capped at the cumulative loss on the assets other than goodwill (the goodwill loss is never reversed). Assets outside the measurement scope and liabilities are not reduced by the loss; liabilities are presented separately, without offsetting against the assets, and interest continues to be recognised. Then prepare the entries.

Questions of the file covered by this workpaper

• Is the division a discontinued operation? Justify, without a numerical threshold.
• Compute the loss of the group, allocate it (goodwill first) and determine the carrying amounts after the loss.
• Record the loss of the group and the two disposals.

• MemoBoard noteOpen
• ScheduleCarrying amounts and fair value of the groupOpen
• ScheduleIncome statement of the divisionOpen
• ContractDeeds of disposalOpen
• InvoiceAudit feesOpen