Document ID: chunk:federal_register_of_legislation:F2023C00180:reg:20:p1
Version: federal_register_of_legislation:F2023C00180
Segment Type: reg
Provision Reference: reg 20 (pt 1/17)
Character Range: 196358–200799

20                                                                                                                                                                                                                                                                                                                                                                                                                               10                                  1                   35          2      71      4
Value in use                                                                                                                                                                                                                                                                                                                                             199                                                  164                                                    271                     720(a)

  (a) It is assumed that the research centre generates additional future cash flows for the entity as a whole. Therefore, the sum of the value in use of each individual cash-generating unit is less than the value in use of the business as a whole. The additional cash flows are not attributable to the headquarters building.

Schedule 3. Impairment testing A, B and C

End of 20X0                                                      A       B        C

                                                                 CU      CU       CU

Carrying amount (after allocation of the building) (Schedule 1)  119     206      275
Recoverable amount (Schedule 2)                                  199     164      271
Impairment loss                                                  0       (42)     (4)

IE77 The next step is to allocate the impairment losses between the assets of the cash-generating units and the headquarters building.
Schedule 4. Allocation of the impairment losses for cash-generating units B and C

Cash-generating unit               B                     C

                                   CU                    CU

To headquarters building           (12)  (42 × 56/206)   (1)  (4 × 75/275)
To assets in cash-generating unit  (30)  (42 × 150/206)  (3)  (4 × 200/275)
                                   (42)                  (4)

IE78 Because the research centre could not be allocated on a reasonable and consistent basis to A, B and C's cash-generating units, M compares the carrying amount of the smallest group of cash-generating units to which the carrying amount of the research centre can be allocated (ie M as a whole) to its recoverable amount.
Schedule 5. Impairment testing the smallest group of cash-generating units to which the carrying amount of the research centre can be allocated (ie M as a whole)

End of 20X0                                              A       B        C    Building  Research centre  M

                                                         CU      CU       CU             CU                  CU     CU

Carrying amount                                          100     150      200            150                 50     650
Impairment loss arising from the first step of the test  –       (30)     (3)            (13)                –      (46)
Carrying amount after the first step of the test         100     120      197            137                 50     604
Recoverable amount (Schedule 2)                                                                                     720
Impairment loss for the 'larger' cash-generating unit                                                               0

IE79 Therefore, no additional impairment loss results from the application of the impairment test to M as a whole. Only an impairment loss of CU46 is recognised as a result of the application of the first step of the test to A, B and C.

Example 9 Disclosures about cash-generating units with goodwill or intangible assets with indefinite useful lives
The purpose of this example is to illustrate the disclosures required by paragraphs 134 and 135 of AASB 136.

Background
IE80 Entity M is a multinational manufacturing firm that uses geographical segments for reporting segment information. M's three reportable segments are Europe, North America and Asia. Goodwill has been allocated for impairment testing purposes to three individual cash-generating units—two in Europe (units A