CERTYNEX IFRS ACADEMY

Coursan operates a quarry and the private railway line linking it to the national network. The line could only be sold for its scrap value, which is below its carrying amount, and it does not generate cash inflows independent of those of the quarry, which continues to use it fully. After a flood damaged the line, the accountant proposes to estimate the recoverable amount of the line alone, equal to its scrap value. What is the right approach?

Do not test the line, since it generates no cash inflows of its own.

Set the line's recoverable amount at zero, for lack of its own cash flows, and write it off in full.

Follow the accountant: the line's recoverable amount is its scrap value.

Estimate the recoverable amount of the CGU to which the line belongs, as no exception to the asset-by-asset test applies.