1)
Introduction: When the fair market value of a business asset decreases more than the asset's book value on the company's financial statements, the asset is said to be impaired. Assets that are deemed to be impaired must be shown as a loss on an income statement.
The amount of impairment loss.
2)
Introduction:
To Prepare: The entry to record the loss.
3)
Introduction: When the fair market value of a business asset decreases more than the asset's book value on the company's financial statements, the asset is said to be impaired. Assets that are deemed to be impaired must be shown as a loss on an income statement.
The amount of Impairment loss
4)
Introduction: When the fair market value of a business asset decreases more than the asset's book value on the company's financial statements, the asset is said to be impaired. Assets that are deemed to be impaired must be shown as a loss on an income statement.
The amount of Impairment loss.
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
NSU COMBO F/INTERM.ACCTG-CONNECT ACCESS
- most probable cost is $4,300,000. As a result of the above facts, what accounting recognition, if any, should be accorded this situation under IFRS? A. Shosho should accrue a loss contingency of $1,800,000 and disclose an additional contingency of up to $2,800,000. B. Shosho should not accrue a loss contingency but disclose a contingency of up to $1,800,000 C. Shosho should accrue a loss contingency of $4, 300,000 and disclose an additional contingency of up to $300,000 D. Shosho should not accrue a loss contingency or disclose any contingencyarrow_forwardWhich method of deprecaution is used when the cost of an asset is written off in equal amounts over its expected economic life? A fixed instalment B accelerated C sum of the digits D diminishing balancearrow_forwardCurrent Attempt in Progress Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the R O amount charged to depreciation expense since the acquisition of the asset. O amount to be deducted from the cost of the asset to arrive at its fair value. O amount charged to depreciation expense in the current period. O cash fund to be used to replace assets. eTextbook and Mediaarrow_forward
- 1. Determine the impairment loss, if any, to be recorded on December 31,2020 a) Assume that the fair Value of the Conchita Division is 41764000 instead of $1850000. Determine the impairment loss, if any, to be recorded on December 31,2020 b) Prepare the journal entry to record the impairment loss, if any, and indicate where loss would be reported in the income statementarrow_forwardWhich of the following methods is used to amortize intangible assets over their useful lives? a. a declining balance methodb. straight linec. annual review for impairmentd. intangible assets are not amortizedarrow_forwardLaw Co. reported the following calculation relating to an impairment loss suffered on December 31, 2021: Goodwill Other assets 3,000,000 (3,000,000) 0 Carrying amount Impairment loss Adjusted carrying amount 9,000,000 (2,000,000) 7,000,000 There has been a favorable change in the estimate of the recoverable amount of the net assets. The recoverable amount is now P8,000,000 on December 31, 2022. The "Other assets" are depreciated at 20% of reducing balance. Required: 1. How much is the carrying amount of the "Other assets" on December 31, 2022 had there been no impairment? 2. What amount of gain on reversal of impairment should be recognized in 2022? 3. What amount of the gain on reversal of impairment is applied to goodwill? +arrow_forward
- When the carrying amount of an asset exceeds its recoverable amount, the asset is impaired. the excess represents impairment loss. there is a need to write-down the asset’s carrying amount to its recoverable amount. d. all of these 2. According to PAS 36 Impairment of Assets, the recoverable amount of an asset a. is determined only if there are indications that the asset is impaired. b. is determined at least annually. c. need not be determined if there are no indications for impairment, except for intangible assets with indefinite useful life, intangible assets not yet available for use, and goodwill acquired in a business combination which are required to be tested for impairment at least annually. d. is determined only if there are indications that the asset is impaired and need not be determined if there are no indications for impairment, except for intangible assets with indefinite useful life, intangible assets not yet available for use, and goodwill acquired in a business…arrow_forwardAn asset group is being evaluated for an impairment loss. The following financial information is available for the asset group: Carrying Value=100,000,000 Sum of the undiscounted cash flows= 95,000,000 Fair value= 80,000,000 Carrying Value= $100,000,000 What is the value of the impairment loss?arrow_forwardIndicate whether each of the following statements is true or false. An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future cash flows from the use of that asset. Answer The economic performance of an asset being worse than expected can be viewed as an external indicator of impairment of asset values for property, plant and equipment. Answer Under IFRS, an impairment loss can be reversed when estimates change.arrow_forward
- 6. Describe how to apply Straight-Line Depreciation, Declining Balance Depreciation, Double Declining Balance Depreciation, and Sum-of-the-Years' Digits Depreciation methods and include examples of calculations and journal entries used for each method.arrow_forwardOf the following, what information is required to calculate depreciation allowances under MACRSGDS? I. Useful life II. First cost. III. Salvage value. IV. Property class a. II and IV only. b. II, III, and IV only. c. I, II, and IV only. d. I, II, III, and IV.arrow_forwardThe impairment test for goodwill is conducted based on the cash-generating unit to which the goodwill has been assigned. After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods. options : both statement false first statement true and second statement false fisrt statement false and second statement ttrue . both sttament truearrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning