CERTYNEX IFRS ACADEMY

Alba SA must test the net investment in Brise, an associate, whose whole carrying amount, including goodwill, is 2,000,000. There is objective evidence of impairment. How does it apply IAS 36?

It tests the goodwill of the investment separately, then allocates it to the largest cash-generating unit available to Alba, before comparing the values.

It compares the whole carrying amount with the lower of value in use and fair value less costs of disposal.

It compares the carrying amount excluding goodwill with the recoverable amount, the associate's goodwill being left out of the IAS 36 test.

It tests the whole carrying amount as a single asset, against the higher of value in use and fair value less costs of disposal.