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
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter15: Financial Statement Analysis
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  1. 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.

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