Key Topics: Cash generating units, impairments, value in use, fair value and discount rates, disposal groups held for sale, discontinued operations, consolidated financial statements, subsequent events, deferred tax, disposal group held for sale

Standards covered: IAS 36 impairments, IFRS 5, non-current assets held for sale and discontinued operations, IAS 10 events after the reporting period, IAS 12 income taxes, IFRS 5, non-current assets held for sale and discontinued operations,

Description: This question explores when an impairment should take place and therefore indicators of impairment. The requirement wants you to think about the methods used to calculate the value in use and consider if this as well as the discount rate are acceptable. The question requires you to consider whether a disposal group held for sale exists across a two-year period. You need to consider if the criteria for a held for sale asset has been satisfied and whether this represents discontinued operations. You are required to consider if a condition existed at the reporting date and therefore if this constitutes an adjusting event in relation to the sale of a business in the post year end period. You are also required to consider if a deferred tax asset should be recognised on the sale of that business and consider if the criteria has been satisfied.