Evaluation Of The Co Operative Bank

2647 Words Dec 10th, 2014 11 Pages
Impairment; an understanding

Module Code: BST152 Module Title: Advanced Financial Reporting Lecturer Name: Dr Richard Baylis Years of Study: 2014/2015 Student Name: Xueyao Zhou Student Number: 1426708 Word Length: 1230+ words

Contents
Part 1 Impairment Review for Tin Plc 1
Part 2 the Report for the Co-operative Bank 3
Part 3 Evaluation between Historical Cost and Fair Value with Impairment X
Reference X

Part 1 Impairment Review for Tin Plc
(a) Tin Plc cash generating unit and impairment loss on the 31 December 2013. Notice: CGU=cash generating unit; VIU=value in use; Net selling price (£’000) =3,250,000-250,000=3,000,000
Carrying value (£’000) =4,000,000-440,000=3,560,000

(b) Allocation of the impairment
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Also, it would compare with the interim financial report of prior year. Whilst, all the fundamental data from the original document could be sought at the official website of The Co-operative Bank plc.

There are five sections in this report – the amount of impairment, the causes of impairment, managements’ assessment of the significance, impact of impairment on the current and future performance and advice for investment - which mainly focus on analysis of impairment.

The amount of impairment
Some financial background will be as follows. The definition of impairment is the difference between recoverable amount and carrying amount. The impairment losses would be negative to financial conditions. For example, when the asset was damaged by some uncontrolled accident, a reduction will be occurred in a company’s stated capital. By contrast, impairment gains are deemed as the firm assets maintain worth conditions more than the original thought.

1. The Segmental information of impairment
In this report of Bank, improved credit conditions, restructuring of assets, and the disposal of Non-core assets at favourable prices are main reasons of the overall write back of impairment, as a part of the Bank’s strategy to exit the books.

According to the Interim Financial Report for the six period from 1 January 2014 to 30 June 2014 for The Co-operative Bank
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