Asset Group A
① Net book value of Asset Group A (excluding goodwill)
Net book value of A1 Equipment＝2 000－2 000/5＝1 600 (in ten thousand Yuan)
Net book value of A2 Equipment＝2 500－2 500/5＝2 000 (in ten thousand Yuan)
Net book value of A3 Equipment＝3 000－3 000/5＝2 400 (in ten thousand Yuan)
Total net book value excluding goodwill is ＝1 600＋2 000＋2 400＝6 000 (in ten thousand Yuan)
②Test impairment on asset group excluding goodwill, calculate recoverable amount and impairment loss. Asset Group A’s recoverable amount is 5 000 (in ten thousand Yuan); net book value excluding goodwill is 6 000 (in ten thousand Yuan); assets impairment loss that should be recognized is 1 000 (in ten thousand Yuan).
③Test impairment on asset group including goodwill, calculate recoverable amount and impairment loss. Asset Group A’s net book value including goodwill is ＝6 000＋300＝6 300 (in ten thousand Yuan); Asset Group A’s recoverable amount is 5 000 (in ten thousand Yuan); assets impairment loss that should be recognized is 1 300 (in ten thousand Yuan).
④ Impairment loss 1 300 (in ten thousand Yuan) should be pro rated and offset net book value 300 (in ten thousand Yuan) of goodwill of asset group. Remainder impairment loss 1 000 (in ten thousand Yuan) should be splited based on net book value proportion of A1/A2/A3 equipments. That is impairment loss apportioned to goodwill is ＝1 300－1000＝300 (in ten thousand Yuan).
Impairment loss pro rated to A1 Equipment＝1 000×1 600/6 000＝266.67(in ten thousand Yuan)
Impairment loss pro rated to A2 Equipment＝1 000×2 000/6 000＝333.33 (in ten thousand Yuan)
Impairment loss pro rated to A3 Equipment＝1 000×2 400/6 000＝400 (in ten thousand Yuan)
Asset Group B
① Net book value of Asset Group B (excluding goodwill)
Net book value of B1 Equipment＝1 500－1 500/5＝1 200 (in ten thousand Yuan)
Net book value of B2 Equipment＝3 500－3 500/5＝2 800 (in ten thousand Yuan)
Total net book value of Asset Group B excluding goodwill is ＝1 200＋2 800＝4 000 (in ten thousand Yuan)
②Test impairment on asset group excluding goodwill, calculate recoverable amount and impairment loss. Asset Group B’s recoverable amount is 4 100 (in ten thousand Yuan); net book value excluding goodwill is 4 000 (in ten thousand Yuan); therefore, no impairment loss is recognized.
③Test impairment on asset group including goodwill, calculate recoverable amount and impairment loss. Net book value of Asset Group B excluding goodwill is ＝4 000＋200＝4 200 (in ten thousand Yuan); Asset Group B’s recoverable amount is 4 100 (in ten thousand Yuan).
④Asset Group B’s recoverable amount is 4 100 (in ten thousand Yuan) is less than net book value of Asset Group B excluding goodwill 4 200 (in ten thousand Yuan). Impairment loss that should be recognized is 100 (in ten thousand Yuan)
Impairment loss that should be pro rated to goodwill is
＝100－0＝100 (in ten thousand Yuan), Asset Group B could recognize no impairment loss on asset.
Debit: Asset impairment loss（300＋100）400
Credit: Provision for goodwill impairment 400
Debit: Asset impairment loss 1 000
Credit: Provision for asset impairment ——A1 Equipment 266.67
——A2 Equipment 333.33
——A3 Equipment 400
