Fitzgerald Inc. uses IFRS and accounts for their property plant & equipment at amortized cost. Fitzgerald has a cash generating unit, Small Division, with a very unique business. Small Division has the following carrying amounts at June 30, 2021, its year end: Land Building Equipment $ 2,000 30,000 5,800 At June 30, 2021, the undiscounted future cash flows from operation and disposal of the division are estimated to be $38,000 (present value $33,500). The land could now be sold for $3,000 (net of costs) but no separate valuations can be done on the building and equipment as there is little market for them for standalone use. Required: a. Perform impairment testing for the Small Division and calculate any impairment loss. b. Prepare the journal entry resulting from (a) c. Would your answer change if Fitzgerald reported under ÁSPE? How & Why?

Fitzgerald Inc. uses IFRS and accounts for their property plant & equipment at amortized cost. Fitzgerald has a cash generating unit, Small Division, with a very unique business. Small Division has the following carrying amounts at June 30, 2021, its year end: Land Building Equipment $ 2,000 30,000 5,800 At June 30, 2021, the undiscounted future cash flows from operation and disposal of the division are estimated to be $38,000 (present value $33,500). The land could now be sold for $3,000 (net of costs) but no separate valuations can be done on the building and equipment as there is little market for them for standalone use. Required: a. Perform impairment testing for the Small Division and calculate any impairment loss. b. Prepare the journal entry resulting from (a) c. Would your answer change if Fitzgerald reported under ÁSPE? How & Why?

Name: Fitzgerald Inc. uses IFRS and accounts for theirproperty plant & equi
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Description: Fitzgerald Inc. uses IFRS and accounts for theirproperty plant & equipment at amortized cost.Fitzgerald has a cash generating unit, SmallDivision, with a very unique business. SmallDivision has the following carrying amounts atJune 30, 2021, its yea

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 14M

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