Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 12, Problem 12.4BE
To determine
To obtain: Journal entries to record the impairment loss in the books of account.
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An asset group is being evaluated for an impairment loss. The following financial information is available
for the asset group:
Carrying
Value=100,000,000
Sum of the undiscounted cash flows= 95,000,000
Fair value= 80,000,000
Carrying Value= $100,000,000
What is the value of the impairment loss?
Muskoko Inc. purchased a property for $1.800,000 in 2022. The carrying value of property was $1,500,000 when it was required to be tested for impairment at
December 31, 2026. The fair value at December 31, 2026 is $1,250,000 and the present value of future cash flows from the production facility was calculated as
S1.056.000 at December 31, 2026. What is the total impairment of the production facility. if any?
Answers A-E
A impairment gain of $ 5S0.000
B Impairment loss of $ 250.000
No impairment gain or loss
D Impairmenit gain of $300.000
E mpairment loss of $ 444,000
Diva Ltd has an item of equipment with a carrying amount of $110000 (cost $150000 less accumulated depreciation $40000). the following data has been obtained by Diva in relation to the asset;
estimated fair value of the asset less costs of disposal - $90,000
present value of future cash flows expected to be derived from the asset $70000
To account for the impairment loss, the accountant for Diva is considering a number of accounting entries.
In accordance with IAS 16 Property, Plant and Equipment and IAS 36 impairment of assets, which one of the following entries is made to recognise the impairment loss?
Chapter 12 Solutions
Intermediate Accounting
Ch. 12 - Prob. 12.1QCh. 12 - Can firms group all property, plant, and equipment...Ch. 12 - Prob. 12.3QCh. 12 - Prob. 12.4QCh. 12 - Do firms follow the same steps for impairment...Ch. 12 - Prob. 12.6QCh. 12 - Prob. 12.7QCh. 12 - Prob. 12.8QCh. 12 - Under IFRS, if a firm recovers an impairment loss...Ch. 12 - Under IFRS, when do firms test plant assets and...
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Prob. 12.1MCCh. 12 - Prob. 12.2MCCh. 12 - Prob. 12.3MCCh. 12 - Prob. 12.4MCCh. 12 - Prob. 12.5MCCh. 12 - Prob. 12.6MCCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Indefinite-Life Intangible Asset Impairment....Ch. 12 - Prob. 12.6BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.16BECh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.19BECh. 12 - Prob. 12.20BECh. 12 - Prob. 12.21BECh. 12 - Prob. 12.22BECh. 12 - Prob. 12.23BECh. 12 - Tangible Asset Impairment. Henne Optical...Ch. 12 - Tangible Asset Impairment Loss. Use the same...Ch. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Tangible Asset Impairment Loss, IFRS. Use the same...Ch. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Assets Held for Disposal. Hattie Corporation...Ch. 12 - Prob. 12.11ECh. 12 - Asset Revaluation, Downwards, IFRS. Lousa Company...Ch. 12 - Tangible Asset Impairment. Chrispian Cookies, Inc....Ch. 12 - Prob. 12.2PCh. 12 - Tangible Asset Impairment. Using the same...Ch. 12 - Prob. 12.4PCh. 12 - Goodwill Impairment, Tangible Fixed Assets, and...Ch. 12 - Tangible Asset Impairment, Potential Reversal,...Ch. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Comprehensive Asset Revaluation Problem (Initial...Ch. 12 - Prob. 12.11PCh. 12 - Judgment Case 1: Impairments of PPE under IFRS...Ch. 12 - Prob. 2JCCh. 12 - Prob. 3JCCh. 12 - Financial Statement Analysis Case 1: Long-Lived...Ch. 12 - Surfing the Standards Case 1: Impairments of PPE...Ch. 12 - Prob. 2SSCCh. 12 - Prob. 1BCCCh. 12 - Basis for Conclusions Case 2: Intangible Assets ...Ch. 12 - Basis for Conclusions Case 3: Goodwill Impairment...
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- the equipment had a fair value of $4,500,000. The equipment originally cost Brody $4,680,000, had accumulated depreciation of $468,000, and had expected future net cash flows of $3,120,000. REQUIRED: What is the impairment journal entry for this assetarrow_forwardFlanagan Concrete owns equipment with a book value of $3,500,000. The equipment is estimated to generate future cash flows of $2,975,000. The equipment has a fair value of $2,890,000. The journal entry to record the impairment loss will a.) increase the asset’s Accumulated Depreciation account by $610,000. b.) include a $610,000 credit to the Equipment account. c.) record a loss of $85,000. d.) reduce income from continuing operations by $525,000.arrow_forwardProperty, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) $ 54,644 Cost of property and equipment (end of year) 59,766 Capital expenditures during the year 6,510 Accumulated depreciation (beginning of year) 28,016 Accumulated depreciation (end of year) 29,310 Depreciation expense during the year 2,490 Cost of property and equipment sold during the year 1,388 Accumulated depreciation on property sold 1,196 Cash received on property sold 130 Required: Compute the amount of property and equipment that United Presents…arrow_forward
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Asset impairment explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=lWMDdtHF4ZU;License: Standard Youtube License