A company runs a Business unit that suffers a massive drop in income due to the failure of its technology on 1 January 2014. The following carrying values were recorded in the books immediately prior to the impairment: $M Goodwill 14 Technology 7 Brands 11 Land 45 Buildings 40 Other net assets 39 The recoverable value of the unit is estimated at $85 million. The technology is worthless, following its complete failure. The other net assets include inventory, receivables and payables. It is considered that the book value of the other net assets is a reasonable representation of its net realizable value. Show the impact of the impairment on 1 January 2014.
A company runs a Business unit that suffers a massive drop in income due to the failure of its technology on 1 January 2014. The following carrying values were recorded in the books immediately prior to the impairment: $M Goodwill 14 Technology 7 Brands 11 Land 45 Buildings 40 Other net assets 39 The recoverable value of the unit is estimated at $85 million. The technology is worthless, following its complete failure. The other net assets include inventory, receivables and payables. It is considered that the book value of the other net assets is a reasonable representation of its net realizable value. Show the impact of the impairment on 1 January 2014.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 47E: Bryce Company manufactures pet supplies. However, Bryces electronic accounting system recently...
Related questions
Question
- A company runs a Business unit that suffers a massive drop in income due to the failure of its technology on 1 January 2014. The following carrying values were recorded in the books immediately prior to the impairment:
$M
Technology 7
Brands 11
Land 45
Buildings 40
Other net assets 39
The recoverable value of the unit is estimated at $85 million. The technology is worthless, following its complete failure. The other net assets include inventory, receivables and payables. It is considered that the book value of the other net assets is a reasonable representation of its net realizable value.
Show the impact of the impairment on 1 January 2014.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning