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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