Assets are grouped into cash-generating units for the purpose of impairment testing if they do not generate independent cash flows on their own.

Question

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Assets are grouped into cash-generating units (CGUs) for impairment testing when they do not generate cash inflows that are largely independent of those from other assets or groups of assets, making it necessary to evaluate them as a collective group to determine if an impairment loss should be recognized.

Assets Are Grouped into Cash-Generating Units for the Purpose of Impairment