Property, Plant and Equipment (PPE)180,000 360,000 An annual impairment review is required as the cash-generating unit contains goodwill The most recent review assesses its recoverable amoun
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GH₵
Patent right120,000
Property, Plant and Equipment (PPE)180,000
360,000
An annual impairment review is required as the cash-generating unit contains goodwill
The most recent review assesses its recoverable amount to be GH₵ 270,000
Required:
Determine how the impairment loss will be allocated
Step by step
Solved in 2 steps
- Estimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.The company provided the data of PP&E in a cash-generating unit (CGU) as follows: Cost Accumulated Depreciation Equipment A $ 15,000 $ 8,000 Equipment B 30,000 19,000 Equipment C 45,000 23,000 The unit’s fair value less costs to sell was $25,000. The unit’s future cash flows was $32,000, and its present value was $28,000. The company adopted IFRS. Prepare journal entries to record impairment. If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment. If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.the equipment had a fair value of $4,500,000. The equipment originally cost Brody $4,680,000, had accumulated depreciation of $468,000, and had expected future net cash flows of $3,120,000. REQUIRED: What is the impairment journal entry for this asset
- ABC is testing a store branch for impairment. The assets of thebranch include a building with a carrying amount of P4,000,000,equipment of P3,000,000, inventory of P2,000,000 and goodwill ofP500,000. The fair value less cost to dispose of the inventory is P2,500,000.The expected cashflows from the branch are: Year Amount1 P 2,000,0002 1,700,0003 1,500,0004 1,500,0005 1,300,000 The effective interest rate is 9%. The present value of the cashflowsbeyond year 5 is estimated to be at P400,000. 10. Value in use of the store branch11. Total Impairment Loss12. Carrying value of the building after impairment13. Carrying value of the inventory after impairment14. Carrying value of the goodwill after impairmentImpairment is defined as a reduction in the value of a company asset, whether fixed or intangible which decline the asset's quality, quantity, or market value. (a) The carrying amount of a machinery is RM525,000. This consists of goodwill of RM75,000, development costs of RM150,000 and machinery of RM300,000. The machinery has a recoverable amount of RM330,000. Calculate the carrying amount of the machinery after the impairment loss has been allocated.Impairment is defined as a reduction in the value of a company asset, whether fixed or intangible which decline the asset's quality, quantity, or market value. (a) The carrying amount of a machinery is RM525,000. This consists of goodwill of RM75,000, development costs of RM150,000 and machinery of RM300,000. The machinery has a recoverable amount of RM330,000. Calculate the carrying amount of the machinery after the impairment loss has been allocated. (b) Syarikat Alfa has a year-end of 31 December and operates a factory which makes computer chips for mobile phones. It purchased a machine on 1 July 2016 for RM80,000 which had a useful life of ten years and is depreciated on a straight-line basis, time apportioned in the years of acquisition and disposal. The machine was revalued to RM81,000 on 1 July 2017. There was no change to its useful life at that date. A fire at the factory on 1 October 2019…
- Diva Ltd has an item of equipment with a carrying amount of $110000 (cost $150000 less accumulated depreciation $40000). the following data has been obtained by Diva in relation to the asset; estimated fair value of the asset less costs of disposal - $90,000 present value of future cash flows expected to be derived from the asset $70000 To account for the impairment loss, the accountant for Diva is considering a number of accounting entries. In accordance with IAS 16 Property, Plant and Equipment and IAS 36 impairment of assets, which one of the following entries is made to recognise the impairment loss?ABC has determined that one of its cash generating units (CGU) is impaired. The assets of the CGU at their book value are: Land – 4,000,000; Factory – 1,200,000; Machinery and Equipment – 1,800,000. The value in use of the cash generating unit is P5,500,000. The impairment loss allocated to Machinery and Equipment is? (do not round off the percentage, round off your final answer to the nearest peso)Cash-generating unit (adopted from Wiley publication) Sydney Ltd reported the following assets in its statement of financial position at 30 June 2020: Assets Carrying Amount Plant $570 000 Land 300 000 Patent 240 000 Office equipment 280 000 Inventory 400 000 $1 790 000 The recoverable amount of the entity was calculated to be $1 660 000. The fair value less costs of disposal of the land was $280 913. Required: Prepare the journal entry for any impairment loss at 30 June 2020. Answer: Carrying amount of assets = Recoverable amount = Impairment loss = Assuming the inventory is carried at the lower of cost and net realisable value, the allocation of the impairment loss will not involve both cash and inventory
- Sylvia Company has a long-term plant asset with the following information as of the end of the year: Net book value $87,200 Estimated future cash flows $68,000 Fair Value $60,000 The amount of the impairment loss is: A. $155,200 B. $19,200 C. $8,000 D. $27,200A cash-generating unit comprises the following assets: £000 Goodwill : 440 Land : 2,560 Plant and equipment : 800 3,800 One of the pieces of equipment, carried at £160,000, is damaged and will have to be scrapped. The recoverable amount of the cash-generating unit is estimated at £3,000,000 What will be the carrying amount of the land after the impairment loss has been recognised? Select one: a) £2,400,000 b) £2,285,176 c)£2,021,052 d)£2,111,472 e)£300,000The components of the cost of a major item of equipment are given below.GHSPurchase price 780,000Import duties 117,000VAT (refundable) 78,000Site preparation 30,000Installation costs 28,000Pre-production costs 18,000Initial operating losses before the asset reaches planned performance 50,000Estimated cost of dismantling and removal of the asset, recognized as a provision under IAS 37 Provisions,Contingent Liabilities and Contingent Assets 100,0001,201,000In accordance with IAS 16 Property, Plant and Equipment, what amount should be recognized as the cost of the asset?
