Page 3 - 10. COMPILER QB - INDAS 36

Impairment loss* (500) (913) (1413)
Carrying amount after impairment loss 0 3,120 3,120
* Notes:
1. As per INDAS 36, an impairment loss should be allocated to reduce the carrying amount of the assets of

the unit in the following order:
(a) first, to goodwill allocated to the cash-generating unit (if any); and
(b) then, to the other assets of the unit on a pro-rata basis based on the carrying amount of each asset in
the unit.
Hence, first goodwill is impaired at full value and then identifiable assets are impaired to arrive at recoverable
value.

(ii) Carrying amount of the assets at the end of 20X6 (Amount in Rs. lakhs)
End of 20X6 Goodwill Identifiable Total
assets
Carrying amount in 20X6 0 2,553 2,553
Add: Reversal of impairment loss (W.N.2) - 747 747
Carrying amount after reversal of impairment loss - 3,300 3,300

Working Note:
1. Calculation of depreciation after impairment till 20X6 and reversal of impairment loss in 20X6
(Amount in Rs lakhs)
Goodwill Identifiable Total
assets
A. Carrying amount after impairment loss in 20X4 0 3,120 3,120
B. Additional depreciation (i.e. (3,120/11) x 2)refer Note – (567) (567)
C. Carrying amount 0 2,553 2,553
D. Recoverable amount 3,420
E. Excess of recoverable amount over carrying amount (D-C) 867

Note: It is assumed that the restriction by the Government has been lifted at the end of the year 20X6.
Therefore, depreciation for 2 years is calculated (2005, 2006).

2. Determination of the amount to be impaired by calculating depreciated historical cost of the

identifiable assets without impairment at the end of 20X6
(Amount in Rs lakhs)
End of 20X6 Identifiable assets
Historical cost 5,500
Accumulated depreciation (366.67 x 6 years) = (2,200)
Depreciated historical cost 3,300
Carrying amount (in W.N. 1) 2,553
Amount of reversal of impairment loss 747
Notes:
As per INDAS 36, in allocating a reversal of an impairment loss for a cash-generating unit, the carrying

amount of an asset should not be increased above the lower of:
(a) its recoverable amount (if determinable); and
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