(b) Impairment
Matters:
– Materiality
– Uncertainty relating to estimates
– Growth rate assumption in relation to value in use
– Allocation of impairment does not seem to be correct
Evidence:
– Copies of offers for retail outlets
– Copy of forecast cash flows relating to retail outlets
– Recalculation of forecasts using management’s predictions
– Analytical review by unit/geographical region to assess appropriateness of general growth rate
– Notes re discussion about retail prospects by area
– Schedule of goodwill analysed by division
– Recalculation of allocation of impairment
– Copies of previous forecasts
Maximum marks 7