## Individual Asset in a CGU — The Non-Impairment Rule
### The Extra Concept
Sometimes an individual asset (e.g., a machine) cannot generate cash flows independently, so it is included in a CGU for impairment testing. A critical consequence follows:
> An individual asset is impaired only if the CGU to which it belongs is impaired.
Conversely:
> If the CGU is NOT impaired → the individual asset is NOT impaired, even if its own standalone RA appears to be below its CA.
### Testing Sequence
```
Step 1: Test the entire CGU
CGU CA vs CGU RA
↓
Not Impaired? → Stop. No individual asset in the CGU is impaired.
Impaired? → Proceed to allocate loss to individual assets (Goodwill first, then pro-rata).
```
### Why This Rule Exists
Individual assets in a CGU are interdependent — the machine may be incapable of producing cash alone, but contributes to the group's cash generation. Impairing it in isolation ignores its embedded value within the group.
### Practical Illustration
| Scenario | CGU RA vs CA | Machine RA vs CA | Machine Impaired? |
|---|---|---|---|
| CGU not impaired | RA > CA | RA < CA | No |
| CGU impaired | RA < CA | RA < CA | Yes (allocated share) |
| CGU impaired | RA < CA | RA > CA | Only to the extent of CGU allocation |