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This article is the second of a three-part series on cash-generating units (CGUs). In this article we discuss how to allocate assets to CGUs, which follows an article on how to identify CGUs and then finally we will discuss how to allocate goodwill to CGUs.


Identifying CGUs is a critical step in the impairment review and can have a significant impact on its results. That said, the identification of CGUs requires judgement. The identified CGUs may also change due to changes in an entity’s operations and the way it conducts them.

After the entity identifies its CGUs it must determine which assets belong to which CGUs, or groups of CGUs. The basis of allocation differs for:
• operational assets
• corporate assets, and
• goodwill.

How we can help

We hope you find the information in this article helpful in giving you some insight into MFRS 136. If you would like to discuss any of the points raised, please do not hesitate to contact us.