PPE of an entity was damaged due to a fire accident on 1 September 2014. the accident has caused a drastically drop in the efficiency of the PPE that wouldn’t happen in normal usage. The management is considering to recognize impairment loss for the damages occurred due to the accident. Following are the details that existed as on 1 September 2014: The carrying amount of PPE in the books of the entity stood OMR 121,500. The same type of new PPE would cost OMR 180000. The PPE could be sold for a gross amount of OMR 90,000 with dismantling cost of OMR 2000 and legal charges of OMR2000. The present values of future cash flow from the PPE if continued to be used for next three years would be OMR77370. The total impairment loss recognized for PPE as at 1st September 2014 would be; A.OMR 44130 B.OMR 35500 C.OMR 31500 D.No impairment

PPE of an entity was damaged due to a fire accident on 1 September 2014. the accident has caused a drastically drop in the efficiency of the PPE that wouldn’t happen in normal usage. The management is considering to recognize impairment loss for the damages occurred due to the accident. Following are the details that existed as on 1 September 2014: The carrying amount of PPE in the books of the entity stood OMR 121,500. The same type of new PPE would cost OMR 180000. The PPE could be sold for a gross amount of OMR 90,000 with dismantling cost of OMR 2000 and legal charges of OMR2000. The present values of future cash flow from the PPE if continued to be used for next three years would be OMR77370. The total impairment loss recognized for PPE as at 1st September 2014 would be; A.OMR 44130 B.OMR 35500 C.OMR 31500 D.No impairment

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 23GI

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In 2015, Winnebago Industries recorded an impairment loss of $462,000 on its corporate plane. Assume that the plane originally cost the company $2,350,000 and had accumulated depreciation of $1,598,000 at the time of the impairment charge. What was the plane’s fair value at the end of 2015? Show you calculation.
A fire at the factory on 1 October 2018 damaged the machine leaving it with a lower operatingcapacity. The accountant considers that Phoenix Ltd (Phoenix) will need to recognise animpairment loss in relation to this damage. The accountant has ascertained the followinginformation at 1 October 2018:- Phoenix adopts cost model to account for the machine.- The carrying amount of the machine is $60,750.- An equivalent new machine would cost $90,000.- The machine could be sold in its current condition for a gross amount of $45,000.Dismantling costs would amount to $2,000.- In its current condition, the machine could operate for three more years which gives it avalue in use figure of $38,685.1) In accordance with HKAS 36 ‘Impairment of Assets’, which of the following woulddefinitely NOT be an indicator of the potential impairment of an asset (or group ofassets)?A An unexpected fall in the market value of one or more assetsB Adverse changes in the economic performance of one or more assetsC A…
At 30 June 2019, there was an indication that Modern Machineries Ltd's machinery might be impaired. In preparing for the impairment testing, the accountants have estimated, as at 30 June 2019, the piece of machinery's fair value less costs of disposal to be $495,000 and its value in use to be $580,000. The machinery was purchased and installed on 1 October 2016 by $925,000, The machinery had an accumulated depreciation of $300,000 as on 30 June 2019. Modern Machineries Ltd uses the straight-line method of depreciation for this machinery. Required: Compute the impairment loss to be recorded at 30 June 2019? Journalize the required entries to record the impairment loss to be recorded at 30 June 2019?
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