N Incorporated plans to dispose a group of assets that form part a disposal group. These assets have the following data on December 31, 2021:AssetCarrying valueInventory2 millionEquipment5 millionLand20 millionBuilding15 millionGoodwill3 millionTotal45 millionThe carrying value of the inventory is equal to its net realizable value. On the date of reclassification, the fair value less cost to sell of the disposal group is 40 million. Impairment loss to be recognized on the date of reclassification is: a.3,000,000b.2,000,000c.5,000,000d.Answer not among the choicese.0Clear my choice

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations outlines how to account for…

Answered: N Incorporated plans to dispose a group…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 11MCQ

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N Incorporated plans to dispose a group of assets that form part a disposal group. These assets have the following data on December 31, 2021:

Asset	Carrying value
Inventory	2 million
Equipment	5 million
Land	20 million
Building	15 million
Goodwill	3 million
Total	45 million

The carrying value of the inventory is equal to its net realizable value. On the date of reclassification, the fair value less cost to sell of the disposal group is 40 million.

Impairment loss to be recognized on the date of reclassification is:

3,000,000

2,000,000

5,000,000

Answer not among the choices

Clear my choice

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