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MC Question 19
The accountant has decided that it is too difficult to reliably attribute cash flows to this one machine and that it would
be more accurate to calculate the impairment on the basis of the factory as a cash-generating unit.
In accordance with IAS 36, which of the following is TRUE regarding cash generating units?
| A | A cash-generating unit to which goodwill has been allocated should be tested for impairment every five years |
|---|---|
| B | A cash-generating unit must be a subsidiary of the parent |
| C | There is no need to consistently identify cash-generating units based on the same types of asset from period to period |
| D | A cash-generating unit is the smallest identifiable group of assets for which independent cash flows can be identified |