ACCA SBR December 2026: The IAS 36 Impairment Order That Costs Marks

Impairing a CGU in ACCA SBR? Write the loss off against goodwill first, then pro rata across the other assets, and never push any asset below its recoverable amount. Most candidates lose marks by spreading it evenly from the start.

What SBR markers keep seeing

IAS 36 turns up in SBR Section A and B again and again, usually inside a group scenario. The technical rule is short, so markers expect it applied precisely. The loss on a cash-generating unit is allocated in a fixed order: goodwill first, then the remaining assets pro rata to their carrying amounts.

The second trap is the floor. No individual asset can be written down below the highest of its fair value less costs of disposal, its value in use (if determinable) and zero. If an asset hits its floor, the excess goes back to the other assets pro rata. Candidates who skip this step lose the final-balance marks.

The third trap is partial goodwill. Where the NCI was measured at its proportionate share of net assets, goodwill in the books excludes the NCI's share. Before testing, you gross it up to include notional NCI goodwill. You then recognise only the parent's share of the goodwill impairment.

The fourth trap is the professional marks. Section A carries professional marks for structure and clarity, so a bare set of numbers is never enough. Say why the unit was tested, what the recoverable amount is, and what it means for the group's reported results.

Worked example

A CGU has goodwill of $20m, property of $50m and plant of $30m (carrying amount $100m). Recoverable amount is $70m, so the impairment loss is $30m.

Wrong answer: spread $30m across all three assets pro rata, giving goodwill $6m, property $15m and plant $9m. This ignores the order of allocation.

Correct answer: goodwill is written off in full ($20m). The remaining $10m is shared pro rata between property and plant (5:3), giving property $6.25m and plant $3.75m. Then check each asset against its floor. If the plant's fair value less costs of disposal is $28m, it can only be written down by $2m, and the extra $1.75m moves to property.

What to do

1. Use a fixed layout. Set up columns for carrying amount, impairment and revised carrying amount, with goodwill on the first row. The order of allocation then sorts itself out.

2. Test the floor on every asset. Write "floor check" beside each line, even where it is not triggered. It shows the marker you considered it.

3. Say whose loss it is. If the NCI was measured at the proportion of net assets, gross up goodwill, then state clearly how much of the impairment is charged to the parent and how much to the NCI.

Closing: SBR is 100 marks over 3 hours 15 minutes, and the 4 professional marks in Section A are the easiest ones to bank. Do the IAS 36 order of allocation properly and you pick up marks that others leave on the table.