AS 28 — Corporate Assets in CGU Impairment Testing

# AS 28: Corporate Assets in CGU Impairment Testing

## What Are Corporate Assets?

Corporate assets are assets that serve multiple CGUs but cannot be directly attributed to any single CGU.

Examples: Head office, admission office building, central servers, HR department assets.

They contribute to the future cash flows of several CGUs but cannot independently generate cash inflows.

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## Case 1 — Corporate Asset Is Allocable in a Known Ratio

Use Bottom-up Approach only:

1. Allocate the corporate asset's CA to each CGU in the given ratio (e.g., 30% to CGU1, 70% to CGU2)

2. For each CGU: Total CA = operating assets + allocated portion of corporate asset

3. Compute IL for each CGU; allocate across all assets (including the corporate asset portion) in ratio of CA

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## Case 2 — Corporate Asset Cannot Be Allocated

Use Two-stage (Bottom-up + Top-down) approach:

### Stage 1 — Bottom-up: Test each CGU without the corporate asset

• Allocate IL to that CGU's operating assets in ratio of CA

### Stage 2 — Top-down: Combine all CGUs + Full Corporate Asset

• Check for additional IL at combined level
• Additional IL → corporate asset absorbs first, then other assets in CA ratio

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## Difference Versus Goodwill