At 30 June 2014, Long reach Ltd is considering undertaking an impairment test. Having only recently adopted the international accounting standards, the management of  Long reach Ltd seeks your advice in relation to this test under AASB 136 Impairment of Assets.

Required

Write a report  to management, specifically explaining:

1.   the purpose of the  impairment test

2.   how the existence  of goodwill will affect the impairment test

3.   the basic steps to  be followed in applying the impairment test.