Impairment Test Simple Guide Model- CGU Value In Use Based

This is a useful and simple excel explanation model of the Impairment Loss Test with a dynamic and ready-to-use calculation template.

This model is extremely useful for M&A acquirers to test and perform impairment loss for the purchased assets after the closure of the transaction. By the result of the test, users can learn whether the assets are creating synergy as they expected and what is the performance of individual cash-flow generation units after incorporation with the business of the acquirer.

The model provides a clear and simple Impairment Loss Test guidance explaining the steps to follow and the matters that need to pay attention to in the test.

In addition, the model can be used as a template for analyzing the Value in the Use of individual Cash-flow Generation Unit.

The model is a highly dynamic and flexible. Users can customize the transaction inputs based on their real case by simply adjusting the BLUE numbers. For analyzing the Value in Use of each CGU users can add inputs in blue dotted cells of the corresponding sheet.

The model consists of Three parts, A simple guidance, Assumptions of Value in Use of individual CGU, Impairment Loss Calculation.

In the Guidance, the users can learn generally Impairment Loss Test process and key takeaways of each step. This part provides basic and important information for users who have little experience of the industry and can be great helpful to learn whether the purchased assets have created expected synergies.

In each individual CGU sheet includes the assumptions of metric for Value in Use analysis.

In sheet “Calculation”, users can learn all the details of the mathematical logic of identification of impairment loss and its allocation.

The calculations are quite intuitive and easy to understand without any sophisticated formulas embedded. All users either from finance backgrounds or other fields can easily follow up.

The sheet “Calculation” also includes a glossary for Users to better understand the model.

This model is completely dynamic and flexible allowing the users to modify the key transaction measures and to see the results based on distinct cases. The numbers in color BLUE could be adjusted and the outputs and analysis results will be automatically updated.

The structure of the template follows Financial Modeling Best Practices principles and is fully customizable.

Model Structure

Introduction
• Cover
• Simple Guidance

Assumptions of Value in Use
• CGU -1
• CGU -2
• CGU -3
• CGU -4

Calculations
• Assumptions of transaction
• Impairment Test
• Impairment Allocation

Users’ Support Service

To guarantee the users’ satisfaction, all the models have been built following the Best Financial Modeling Principles and considering the high level of flexibility and user-friendly priority.

With the instructions of the model, even for the users who have no finance or accounting background or have little experience in Microsoft Excel can easily handle with.

Please feel no hesitate to contact us if you experience any problem when using the models provided.

In addition, if you need a customized model for your specific business, please just let us know and we would be happy to help you with this.