This assignment will be marked out of 100 and scaled down to being out of 20.
Q1. The Wentnor Dairy Company Ltd has run for many years dairy farms in Tasmania. In addition to the farms it has vertically integrated by purchasing factories that produce milk products. These products are then are further developed in other factories owned by the company by producing high grade yoghurts.
The chief financial officer for the company has asked your advice on how AASB 136 Impairment of Assets, should be applied to the company’s various activities. In particular she wishes to correctly identify the cash-generating units (CGUs) for the company.
One issue is whether the milk production section is a separate CGU even though the company does not sell milk directly to other entities but uses the products within its own vertically integrated structure or should it should be included in the milk-based products CGU.
Required
Write a letter to the chief financial officer of The Wentnor Dairy Company Ltd, including the following: A. Define a CGU. (2 marks)
B. Explain why impairment testing requires the use of CGUs, rather than being based on single assets. (5 marks)
C. Explain the factors that the chief financial officer should consider in determining the CGUs for The Wentnor Dairy Company Ltd. (6 marks)
Pay particular attention to referencing your advice to the relevant paragraphs of the accounting standard.
We Write Essays for Students
Tell us about your assignment and we will find the best writer for your paper
Get Help Now!Welcome to originalessaywriters.com, our friendly and experienced essay writers are available 24/7 to complete all your assignments. We offer high-quality academic essays written from scratch to guarantee top grades to all students. All our papers are 100% plagiarism-free and come with a plagiarism report, upon request
Tell Us “Write My Essay for Me” and Relax! You will get an original essay well before your submission deadline.
