CERTYNEX IFRS ACADEMY

The Bauxor group operates an alumina mine whose entire output is delivered to its own smelter. Alumina is nevertheless traded on an active market. How should the mine be treated when identifying cash-generating units (CGUs)?

It cannot form a separate CGU, because it sells nothing to customers outside the group.

It forms a separate CGU, since its output could be sold on an active market.

It becomes a separate CGU only if at least half of its output is sold to third parties.

It must be combined with the smelter, because internal transfer prices are set by group management and do not reflect any market.