Page 2 - 10. COMPILER QB - INDAS 36

INDAS 36 –

IMPAIRMENT OF ASSETS

(TOTAL NO. OF QUESTIONS – 13)

INDEX

S.No. Particulars Page No.
1 RTP Questions 10.1

2 MTP Questions 10.13
3 Past Exam Questions 10.15

RTPs QUESTIONS

Q1 (RTP May 18 & MTP April 19 – 12 Marks)

Himalaya Ltd. which is in the business of manufacturing and exporting its product. Sometimes, back at the
end of 20X4, the Government put restrictions on export of goods exported by Himalaya Ltd. and due to that
restriction Himalaya Ltd. impaired its assets. Himalaya Ltd. acquired identifiable assets worth Rs 5,500 lakhs
for Rs 6,000 lakh at the end of the year 20X0. The difference is treated as goodwill. The useful life of

identifiable assets is 15 years and depreciated on a straight line basis. When the Government put the
restriction at the end of 20X4, the company recognised the impairment loss by determining the recoverable
amount of assets for Rs 3,120 lakh. In 20X6 Government lifted the restriction imposed on the export and due
to this favourable change, Himalaya Ltd. re-estimate recoverable amount, which was estimated at Rs 3,420

lakh.
Required:
(i) Calculation and allocation of impairment loss in 20X4.
(ii) Reversal of impairment loss and its allocation as per INDAS 36 in 20X6.

SOLUTION
(Originally this question was asked as per AS 28, we have changed some figures and made treatment as

per INDAS 36)
(i) Calculation and allocation of impairment loss in 20X4
(Amount in Rs. lakhs)
Goodwill Identifiable Total
assets
Historical cost 500 5,500 6,000
Accumulated depreciation/amortization (4 yrs.) - (1,467) (1,467)
Carrying amount before impairment 500 4,033 4,533

10.1