BEAST COMPANY is involved in the generation and distribution of electricity. Management is reviewing all of its assets for impairments as a result of a fall in the market price of electricity. One of BEAST COMPANY’s power station is 5 years old and has a carrying amount of P6,000,000. The power station’s estimated value in use was P5,600,000 considering the revised electricity price. A similar asset was recently sold to a Spanish-based global power utility for P6,100,000. The estimated incremental costs that would be directly attributable to the disposal would be P200,000. The amount of impairment loss to be recognize by BEAST COMPANY is
BEAST COMPANY is involved in the generation and distribution of electricity. Management is reviewing all of its assets for impairments as a result of a fall in the market price of electricity. One of BEAST COMPANY’s power station is 5 years old and has a carrying amount of P6,000,000. The power station’s estimated value in use was P5,600,000 considering the revised electricity price. A similar asset was recently sold to a Spanish-based global power utility for P6,100,000. The estimated incremental costs that would be directly attributable to the disposal would be P200,000. The amount of impairment loss to be recognize by BEAST COMPANY is
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 56P
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BEAST COMPANY is involved in the generation and distribution of electricity. Management is reviewing all of its assets for impairments as a result of a fall in the market price of electricity. One of BEAST COMPANY’s power station is 5 years old and has a carrying amount of P6,000,000. The power station’s estimated value in use was P5,600,000 considering the revised electricity price. A similar asset was recently sold to a Spanish-based global power utility for P6,100,000. The estimated incremental costs that would be directly attributable to the disposal would be P200,000.
The amount of impairment loss to be recognize by BEAST COMPANY is
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