2. ABC Co. has a department that performs machining operations on parts that are sold to contractors. A group of machines had an aggregate carrying amount of P3,690,000 on December 31, 2019. This group of machinery has been determined to constitute a cash generating unit for purposes of applying PAS 36, Impairment of Assets. A cash generating unit is defined in this standard, is the smallest identifiable group of assets that generates cash flows that are largely independent of the cash flows from other assets or groups of assets. Presented below are the data about future expected cash inflows and outflows based on the diminishing productivity expected of the machinery as it ages and the increasing costs that will be incurred to generate output from the machines. Year – Inflows - Outflows (Excludes noncash cash charges) 2020 - 2,250,000 - 840,000 2021 - 2,400,000 - 1,260,000 2022 - 1,950,000 - 1,650,000 2023 - 600,000 - 450,000 The fair value of the machinery in this cash generating unit, net of any estimated disposition costs, is determined to amount to P2,535,000. The co. discounts the future cash flows on this cash generating unit by using 5% rate. Round off your PVF to 5 decimal places. What is the amount of the impairment loss?
2. ABC Co. has a department that performs machining operations on parts that are sold to contractors. A group of machines had an aggregate carrying amount of P3,690,000 on December 31, 2019. This group of machinery has been determined to constitute a cash generating unit for purposes of applying PAS 36, Impairment of Assets. A cash generating unit is defined in this standard, is the smallest identifiable group of assets that generates cash flows that are largely independent of the cash flows from other assets or groups of assets. Presented below are the data about future expected
Year – Inflows - Outflows (Excludes noncash cash charges)
2020 - 2,250,000 - 840,000
2021 - 2,400,000 - 1,260,000
2022 - 1,950,000 - 1,650,000
2023 - 600,000 - 450,000
The fair value of the machinery in this cash generating unit, net of any estimated disposition costs, is determined to amount to P2,535,000. The co. discounts the future cash flows on this cash generating unit by using 5% rate. Round off your PVF to 5 decimal places. What is the amount of the impairment loss?
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