Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Transcribed Image Text:Collinsworth Limited, a U.K. company, prepares its financial statements according to International Financial Reporting Standards. Late
in its 2024 fiscal year, a significant adverse change in business climate indicated to management that the assets of its appliance
division may be impaired. The following data relate to the division's assets:
Book value
Undiscounted sum of estimated future cash flows
Present value of future cash flows
Fair value less cost to sell (determined by appraisal)
Required:
(£ in
millions)
£ 245
235
170
165
1. What amount of impairment loss, if any, should Collinsworth recognize?
2 Assume that Collinsworth prepares its financial statements according to U.S. GAAP and that fair value less cost to sell
approximates fair value. What amount of impairment loss, if any, should Collinsworth recognize?
Note: Enter your answers In millions (l.e., 10,000,000 should be entered as 10).
1. Impairment loss
2. Impairment loss
million
million
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