Document ID: chunk:federal_register_of_legislation:F2023C00180:front:0:p53
Version: federal_register_of_legislation:F2023C00180
Segment Type: other
Provision Reference: 
Character Range: 145310–149384

assets' depreciated historical cost (CU1,500) (see Schedule 2). This increase is recognised immediately in profit or loss.
IE43 In accordance with paragraph 124 of AASB 136, the impairment loss on goodwill is not reversed.
Schedule 2. Determination of the depreciated historical cost of the Country A identifiable assets at the end of 20X3

End of 20X3                                 Identifiable assets

                                            CU

Historical cost                             2,000
Accumulated depreciation (166.7 × 3 years)  (500)
Depreciated historical cost                 1,500
Carrying amount (Schedule 1)                1,113
Difference                                  387

Schedule 3. Carrying amount of the Country A assets at the end of 20X3

End of 20X3                                        Goodwill  Identifiable assets  Total

                                                   CU                             CU        CU

Gross carrying amount                              1,000                          2,000     3,000
Accumulated amortisation                           –                              (414)     (414)
Accumulated impairment loss                        (1,000)                        (473)     (1,473)
Carrying amount                                    –                              1,113     1,113
Reversal of impairment loss                        0                              387       387
Carrying amount after reversal of impairment loss  –                              1,500     1,500

Example 5 Treatment of a future restructuring
In this example, tax effects are ignored.

Background
IE44 At the end of 20X0, entity K tests a plant for impairment. The plant is a cash-generating unit. The plant's assets are carried at depreciated historical cost. The plant has a carrying amount of CU3,000 and a remaining useful life of 10 years.
IE45 The plant's recoverable amount (ie higher of value in use and fair value less costs of disposal) is determined on the basis of a value in use calculation. Value in use is calculated using a pre-tax discount rate of 14 per cent.
IE46 Management approved budgets reflect that:
(a) at the end of 20X3, the plant will be restructured at an estimated cost of CU100. Since K is not yet committed to the restructuring, a provision has not been recognised for the future restructuring costs.
(b) there will be future benefits from this restructuring in the form of reduced future cash outflows.
IE47 At the end of 20X2, K becomes committed to the restructuring. The costs are still estimated to be CU100 and a provision is recognised accordingly. The plant's estimated future cash flows reflected in the most recent management approved budgets are given in paragraph IE51 and a current discount rate is the same as at the end of 20X0.
IE48 At the end of 20X3, actual restructuring costs of CU100 are incurred and paid. Again, the plant's estimated future cash flows reflected in the most recent management approved budgets and a current discount rate are the same as those estimated at the end of 20X2.

At the end of 20X0
 Schedule 1. Calculation of the plant's value in use at the end of 20X0

Year                                                                                                Future      Discounted
                                                                                                    cash flows  at 14%

                                                                                                    CU                      CU

20X1                                                                                                300(a)                  263
20X2                                                                                                280(b)                  215
20X3                                                                                                420(b)                  283
20X4                                                                                                520(b)                  308