3
As per IAS 36, impairment loss is the amount by which carrying amount of asset exceeds its recoverable amount | |||||||||
Carrying amount = Cost of asset - Accumulated depreciation and impairment losses | |||||||||
= 243,000,000-122,000,000 | |||||||||
= 121,000,000 | |||||||||
Recoverable amount = higher of | |||||||||
(i) Assets fair value less costs of disposal | 90,000,000 | ||||||||
(ii) value in use | 94,000,000 | ||||||||
(i.e) recoverable amount = 94,000,000 | |||||||||
Impairment loss = 121,000,000 - 94,000,000 | |||||||||
= 27,000,000 | |||||||||
Entry : | |||||||||
Impairment loss a/c Dr | 27,000,000 | ||||||||
To Provision for impairment a/c | 27,000,000 | ||||||||
(Being provision for impairment being made) | |||||||||
Problem 3 Sanders Corporation operates a factory in Arizona. Due to a change in business climate,...
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