CGU1 CGU2

Carrying value:
Inventories 120,000 150,000
Factory equipment 500,000 750,000
Office equipment 900,000 1,200,000
Building 1,200,000 1,500,000
Goodwill 600,000 400,000
Total 3,320,000 4,000,000

Recoverable amount ( whichever is higher)

Fair value less cost to sell
(excluding cash and receivables) 2,500,000 3,200,000 3,200,000
Value in use
(520,922 x PVF for 10% period of 9) 3,000,000 3,000,000
(446,493 x PVF for 10% period of 11) 2,900,000

Total Impairment loss 320,000 800,000

Applicable to Goodwill 320,000 400,000

Applicable to non-cash assets 400,000

CGU2 Application of Impairment

Carrying value: Before Impairment Loss
Inventories 150,000 - 10,000 140,000 net realizable value is 140k
Factory equipment 750,000 (750/3,450x 390k) - 84,783 665,217
Office equipment 1,200,000 (1200/3,450 x 390k) - 135,652 1,064,348
Building 1,500,000 (1500/3,450 x 390k) - 169,565 1,330,435
Total 3,600,000 - 400,000 3,200,000

CGU2 Application of Impairment

Carrying value: Before Impairment Loss
Inventories 150,000 - 10,000 140,000
Factory equipment 750,000 (750/1,950* x 390k**) - 150,000 600,000
Office equipment 1,200,000 (1200/1,950* x 390k**) - 240,000 960,000
Building 1,500,000 1,500,000 **
Total 3,600,000 - 400,000 3,200,000

** the value of the building retains at 1.5M because the Fair value is still 1.6M, thus not impaired