Solution [Q-1 Dec-07]

1st impairment test [CGUs excluding computer network]

Plant 1 Plant 2 Plant 3
---------------- Rs. ------------
CGU assets 2,500,000 5,000,000 10,000,000
Building [2:3:5] 560,000 840,000 1,400,000
PABX [2:3:5] 280,000 420,000 700,000
3,340,000 6,260,000 12,100,000
Recoverable amount 1,200,000 7,000,000 6,400,000
Impairment loss 2,140,000 - 5,700,000

Loss allocation in proportion of carrying amounts:

CGU assets 1,601,796 - 4,710,744
Building 358,802 - 659,504
PABX 179,401 - 329,752
2,140,000 - 5,700,000

2nd impairment test [Group of CGUs including computer network]

Carrying amounts: Rs.
Plant 1 [2,500,000 - 1,601,796] 898,204
Plant 2 5,000,000
Plant 3 [10,000,000 - 4,701,744] 5,289,256
Building [2,800,000 - 358,802 - 659,504] 1,781,693
PABX system [1,400,000 - 179,401 - 329,752] 890,847
Computer network 2,100,000
15,960,000
Recoverable amount [1,200 + 7,000 + 6,400] 14,600,000
Impairment loss 1,360,000

Loss allocation in proportion of carrying amounts:

Plant 1 76,539
Plant 2 426,065
Plant 3 450,714
Building 151,824
PABX system 75,912
Computer network 178,947
1,360,000

Revised carrying amounts as at 30-06-07:

Rs.
Plant 1 [898,204 - 76,539] 821,665
Plant 2 [5,000,000 - 426,065] 4,573,935
Plant 3 [5,289,256 - 450,714] 4,838,543
Building [1,781,693 - 151,824] 1,629,870
PABX system [890,847 - 75,912] 814,935
Computer network [2,100,000 - 178,947] 1,921,053
14,600,000