Ans:
Would record a $23 Millions Impairment loss on the Equipment
The Impairment Loss should be recorded as Lower of Book Value or Fair Value of the Asset
An Impairment loss=Book Value-Fair Value.
Cost $90 millions
Less:Accumulated Depreciation $27 Millions
Book value as on Date=$90millions-$27 millions= 63 Millions
Less:Fair Value of the Equipment 40 millions
Impairment Loss $23 Millions
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