Page 8 - 34.2 FR MARCH 22 MTP ANSWER

Pro-rata allocation of Land 12% (1,500/12,600) 36% 52% 100%
(4,500/12,600) (6,600/12,600)
Allocation of carrying 216 648 936 1,800
amount of Land (b)
Carrying amount (after 1,716 2,898 4,236 8,850
allocation of Land) (a+b)

Calculation of impairment loss

Step I: Impairment losses for individual cash-generating units and its allocation:
(a) Impairment loss of each cash-generating units
(Rs. in crore)
Particulars Train Railway station Railway tracks

Carrying amount (after allocation of land) 1,716 2,898 4,236
Recoverable amount 1,800 2,700 4,200
Impairment loss - 198 36

(b) Allocation of the impairment loss
(Rs. in crore)
Allocation to Railway Railway
station tracks
Land 44 [198 x (648 / 2,898)] 8 [36 x (936 /
4,236)]
Other assets in cash- [198 x (2,250 / [36 x (3,300/
generating units 154 2,898)] 28 4,236)]
Impairment loss 198 36

Step II: Impairment losses for the larger cash-generating unit, i.e., Pacific Ocean Railway Ltd. as a whole
(Rs. in crore)

Particulars Train Railway Railway Land Building Pacific Ocean
station tracks Railway Ltd.
Carrying amount 1,500 2,250 3,300 1,800 600 9,450
Impairment loss - (154) (28) (52) - (234)
(Step I)
Carrying amount 1,500 2,096 3,272 1,748 600 9,216
(after Step I)
Recoverable 9,600
amount
Impairment loss for the ‘larger’ cash-generating unit (company as a
whole Nil

(b) EITHER
The term ‘contract’ is defined in Ind AS 115 as an agreement between two or more parties that creates
enforceable rights and obligations. In the given case:
 Gifts are distributed by MIL to doctors as a part of its sales promotion activities without there being an

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