Question
Brackenfell Retail tests one of its stores — a cash-generating unit (CGU) — for impairment at December 31, 2026. Goodwill from the acquisition of the store is allocated to it.
| Asset in the CGU | Carrying amount |
|---|
| Goodwill | $50,000 |
| Building | 280,000 |
| Equipment | 140,000 |
| Total | 470,000 |
The recoverable amount of the CGU is $360,000. The equipment on its own could be sold for $125,000 (fair value less costs of disposal); no individual amount can be determined for the building.
Required:
- Total Loss — the impairment loss for the CGU.
- Building — the part of the loss allocated to the building.
- Journal Entry — one entry, reducing each asset directly. Use Impairment Loss, Goodwill, Buildings and Equipment.
Statements in this challenge
- Total LossNumeric Answer
- BuildingNumeric Answer
- Journal EntryJournal Entry
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
How to approach this
IAS 1 — Presentation of Financial Statements
A composite challenge links several statements built from one set of data, so figures flow between them: profit reaches retained earnings, and the closing balances feed the position statement. Complete them in the order the statements depend on each other rather than the order of the tabs.
Common mistakes
- Preparing each statement independently, so the linking figures disagree.
- Carrying a figure forward before finishing the adjustments that change it.
- Reworking a linked figure in one statement without updating it in the others.
Further readingIAS 1: what goes where in a full set of statements