The following information relates to three assets held by a company: Asset A B c ? £'000 E'000 £'000 100 50 40 Carrying amount Fair value less costs of disposal 80 Value in use 60 35 90 70 30 What is the total impairment Loss? Select one: a

Accounting Jan 19, 2021

The following information relates to three assets held by a company: Asset A B c ? £'000 E'000 £'000 100 50 40 Carrying amount Fair value less costs of disposal 80 Value in use 60 35 90 70 30 What is the total impairment Loss? Select one: a. Nil b. £10,000 C. £15,000 d. £20,000

Expert Solution

recoverable amount is greater of value in use or fair value less cost to sell

Asset A = value in use (90) or fair value less cost to sell (80) = 90

Asset B = value in use (70) or fair value less cost to sell (60) = 70

Asset C = value in used (30) or fair value less cost to sell (35) =35

impairement loss = carrying amount - recoverable amount

Asset A = 100- 90

impairment loss = 10

Asset B = 50 - 70

impairment Loss (Profit) = -20

Asset C = 40 - 35

Impairment loss = 5

the total impairment loss is $15000

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