MFRS 136 - Identifying cash-generating units
Insights into MFRS 136In this article we discuss how to identify cash-generating units (CGUs), and in our following articles how to allocate assets to them and also then to allocate goodwill to them.
Our ‘Insights into MFRS 8’ series considers key implementation issues and provides interpretational guidance in certain problematic areas. We also include several examples illustrating the Standard’s requirements.
For entities that operate in a variety of classes of business, geographical locations, regulatory or economic environments or markets, high quality management accounts are essential. They enable management to monitor performance, allocate resources and devise business and market strategies. MFRS 8 ‘Operating Segments’ requires much of this management information for public listed entities to be published externally so that investors, analysts and other users of entities’ financial statements can review an entity’s operations from the same perspective as management.
This introductory article summarises the requirements and scope of MFRS 8 and explains the key steps in determining reportable segments.
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We hope you find the information in this article helpful in giving you some insight into MFRS 8. If you would like to discuss any of the points raised, please do not hesitate to contact us.
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MFRS 136 - If and when to undertake an impairment review
Insights into MFRS 136This article explains if and when a detailed impairment test as set out in MFRS 136 is required. The guidance prescribes different requirements for goodwill and indefinite life intangible assets (including those not ready for use) when compared to all other assets. As such, this article will cover Step3 in the impairment review which is to determine if and when to test for impairment is needed.
Scope and structure of MFRS 136
Insights into MFRS 136This article, Scope and structure of MFRS 136, looks at the scope of the impairment review (i.e. the types of assets that are included) and how it is structured (i.e. the level at which assets are reviewed).