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On 30 June 2019, Angel Ple acquired all the equity shares of Mase Ltd for a cash payment of $260 million The net assets of Mase Ltd on 30 June 2019 were $180 million and no fair value adjustments were necessary upon consolidation of Mase Ltd for the first time. On 31 December 2019, Angel carried out a review of the goodwill on consolidation of Mase Ltd for evidence of impairment. The review was carried out despite the fact that there were no obvious indications of adverse trading conditions for Mase Ltd. The review involved allocating the net asset of Mase Ltd into three cash-generating units and computing the value in use of each unit. The carrying values of the individual units before any impairment adjustments are given below. Unit A Unit B Unit C S million Smillion $ million Patents Property, plant and equipment 60 Net current assets 20 25 Value in use of unit It was not possible to meaningfully allocate the goodwill on consolidation to the individual cash-generating units, but all other net assets of Mase Ltd are allocated in the table shown above. The patents of Mase Ltd have no ascertainable market value but all the current assets have a market value that is above carrying value. The value in use of Mase Ltd as a single cash-generating unit at 31 December 2019 is 205 million. Required (a) Demonstrate how the impairment loss in unit A will affect the carrying value of the net assets of unit A in the consolidated financial statements of Angel. (b) Explain and calculate the effect of the impairment review on the carrying value of the goodwill on consolidation of Mase Ltd at 31 December 2019

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