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------------------------------------------------ DROMID Company has one Cash Generating Unit, and its assets and liabilities at book value on 1 January 2020 are as follows:

On 1 January 2020, DROMID Company carries out an Impairment Test and finds that the Recoverable Amount of its Cash Generating Unit (CGU) is $230 million.

QUESTION ONE: MCQ 1

What is the Loss on Impairment (if any) on DROMID Company's Goodwill on 1 January 2020?

A. $50 million
B. $20 million
C. $10 million
D. $15 million
E. None of these answers

QUESTION ONE: MCQ 2

What is the Carrying Amount of DROMID Company's Goodwill on 2 January 2020 (i.e., after implementing the results of the Impairment Test)?

A. $25 million
B. $20 million
C. $40 million
D. $60 million
E. None of these answers

Impairment loss is calculated by subtracting the recoverable amount from the carrying amount. If the result is a positive number, you have an impairment loss. The carrying amount on the following day is calculated by subtracting the impairment loss from the initial carrying amount.

Explanation:

Impairment occurs when the book value of an asset or cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount is essentially the higher of an asset's fair value minus costs of disposal and its value in use.

Please note that any calculation of impairment loss and carrying amount requires knowing the initial book values of assets and liabilities, which the question does not provide, making it difficult to provide precise answers.

To calculate Loss on Impairment:

Subtract the recoverable amount from the carrying amount. If the result is positive, this is the impairment loss.

To calculate the Carrying Amount on 2 January 2020:

Subtract the impairment loss (if any) from the carrying amount on 1 January 2020.

Learn more about Impairment here:

https://brainly.com/question/34382761

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