in the picture

AUSTRALIAN ACCOUNTING STANDARD ANALYSIS
Table of Contents
Question No. 1    3
(1)    3
(2)    3
(3)    3
(4)    3
Question No. 2    3
(a)    3
(b)    4
Question No. 3    4
(a)    4
(b)    4
References    6
Question No. 1
(1)
AASB 136 Impairment of Assets state that at the end of the financial year, every company should measure the assets at its recoverable value and if the company gets any indication that the carrying value of the asset is greater than its recoverable value and then it should be impaired.
(2)
A cash-generating unit is a small identifiable group of assets that generate cash flows independent to other assets (Merigo & Yang, 2017). Impairment of assets may be applied on single asset if its recoverable amount can be measured reliably and the individual asset is able to generate cash independently.
(3)
Several factors are involved in determining cash generating unit for the company. The decision of management, personal judgement, whether the individual asset is able to generate cash flows independently or nor. Further if the smallest identifiable asset is not able to generate cash flows independently, than it has to be combined with other assets to form cash generating units.
(4)
In the case of Saferide Bus Company, contract has been issued for 5 separate routes, but the company don’t have option to choose single or more routes and reject the other routes. It can chose either one route or reject the entire tender. Hence, in the instant case the cash-generating unit is all 5 routes and no single bus route. It is immaterial that whether the company is able to isolate its cash flows or not. Since the routes have...