CERTYNEX IFRS ACADEMY

When allocating the impairment loss of a CGU of Brévent Logistique, the pro rata share would reduce a warehouse below its fair value less costs of disposal, which is measurable. What does IAS 36 require?

The warehouse is not reduced below the highest of that amount, its value in use if determinable and zero; the remainder goes pro rata to the other assets.

The warehouse takes its full pro rata share, the floor applying to goodwill only.

The warehouse is limited to its fair value less costs of disposal and the unallocated part is simply dropped, with no further entry.

The part not allocated to the warehouse is transferred in full to goodwill, even if goodwill is already reduced to zero.