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Inventory 2,00,000 - 2,00,000
Goodwill 1,50,000 1,50,000 -
Total 12,25,000 2,25,000 10,00,000
*Balancing figure.
note - Impairment is not applicable to Inventory.

(b) Carrying value after adjustment of depreciation (on 31-03-2019)
Rs
Machinery A [4,89,650 – {(4,89,650-50,000)/5}] 4,01,720
Machinery B [3,10,350 – (3,10,350/7)] 2,66,014
Inventory 2,00,000
Goodwill -
Total 8,67,734
note - assuming no change in Value of Inventory, as no data is given.

(c) Calculation of carrying value of CGU as on 31st March, 2019

Carrying values if there was no impairment

Machine A = 10,00,000 - [9,50,000*6yrs / 10yrs] = 4,30,000
Machine B = 5,00,000- [ 5,00,000*4yrs / 10yrs] = 3,00,000
Inventory = 2,00,000

Carrying Value 9,30,000

Recoverable Value (given) = 11,00,000

● since Recoverable value > carrying value, there will be reversal of impairment.
● no impairment for Inventory, therefore no reversal as well.

● only impairment for machine A & B will be reversed.

Reversal for Machine A = 4,30,000 - 4,01,720 = 28,280
Reversal for Machine B = 3,00,000 - 2,66,014 = 33,986

Total credit to P&L = 62,266

Revised carrying values post reversal of impairment
Machine A = 4,30,000
Machine B = 3,00,000
Inventory = 2,00,000

Q4 (Nov. 19)

East Ltd. (East) owns a machine used in the manufacture of steering wheels, which are sold directly to major
car manufacturers.
The machine was purchased on 1st April, 20X1 at a cost of 500 000 through a vendor financing arrangement
on which interest is being charged at the rate of 10 per cent per annum.
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