Broadbeach Plc Is a Manufacturing Company with Three Subsidiaries In Accordance with IAS 36,what Is the Net Effect of Information

question 12

Multiple Choice

Broadbeach Plc is a manufacturing company with three subsidiaries.The following information relates to the goodwill account of Broadbeach Plc for the year ended 30 June 2013. $$\begin{array} { | l | r | r | r | r | } \hline & \text { Goodwill } & \begin{array} { c } \text { Accumulated } \\\text { impairment loss }\end{array} & \begin{array} { c } \text { Carrying amount } \\\text { of CGU }\end{array} & \begin{array} { c } \text { Recoverable amount } \\\text { of CGU }\end{array} \\\hline \text { Mantra Ltd } & 50000 & 10000 & 250000 & 270000 \\\hline \text { Oceania Ltd } & 40000 & \text { Nil } & 310000 & 250000 \\\hline \text { Wave Ltd } & 60000 & \text { Nil } & 450000 & 600000 \\\hline\end{array}$$ In accordance with IAS 36,what is the net effect of above goodwill accounts on the statement of comprehensive income and statement of financial position of Broadbeach Plc?

• A) \[\begin{array} { | l | l | }
• \hline \begin{array} { l }
• \text { Statement of comprehensive } \\
• \text { income }
• \end{array} & \begin{array} { l }
• \text { Statement of financial } \\
• \text { position }
• \end{array} \\
• \hline \text { Increase } & \text { Increase } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline\begin{array} { l }
• \text { Statement of comprehensive } \\
• \text { income }
• \end{array} & \begin{array} { l }
• \text { Statement of financial } \\
• \text { position }
• \end{array} \\
• \hline \text { Decrease } & \text { Decrease } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline\begin{array} { l }
• \text { Statement of comprehensive } \\
• \text { income }
• \end{array} & \begin{array} { l }
• \text { Statement of financial } \\
• \text { position }
• \end{array} \\
• \hline \text { Increase } & \text { Decrease } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \begin{array} { l }
• \text { Statement of comprehensive } \\
• \text { income }
• \end{array} & \begin{array} { l }
• \text { Statement of financial } \\
• \text { position }
• \end{array} \\
• \hline \text { Decrease } & \text { Increase } \\
• \hline
• \end{array}\]

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Definitions:

U.S.GAAP

United States Generally Accepted Accounting Principles, a set of accounting standards used in the U.S. for financial reporting.

Actuarial Adjustment Losses

Losses recognized when there are changes to actuarial assumptions used in calculating pension obligations or other post-retirement benefits.

Periodic Net Income

The net earnings or loss for a specific reporting period, reflecting the company's operational efficiency and earnings capacity.

Cash Basis

A financial recording technique that only acknowledges income and expenditures upon the actual receipt or disbursement of cash.