Allocation of corporate assets
An entity comprises three CGUs and a headquarters building. The carrying amount of the headquarters building of 150 is allocated to the carrying amount of each individual cash-generating unit. A weighted allocation basis is used because the estimated remaining useful life of A’s cash-generating unit is 10 years, whereas the estimated remaining useful lives of B and C’s cash-generating units are 20 years.
Schedule 1. Calculation of a weighted allocation of the carrying amount of the headquarter building
|
End of 20X0 |
A |
B |
Total |
|
|
Carrying amount |
100 |
150 |
200 |
450 |
|
Remaining useful life |
10 years |
20 years |
20 years |
|
|
Weighting based on useful life |
1 |
2 |
2 |
|
|
Carrying amount after weighting |
100 |
300 |
400 |
800 |
|
Pro-rata allocation of the building |
(100/800)= |
200/800)= |
(400/800)= |
100% |
|
Allocation of the carrying amount of the building (based on pro-rata above) |
19 |
56 |
75 |
(150) |
|
Carrying amount (after allocation of the building) |
119 |
206 |
275 |
600 |
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