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Plz I am on exam If ABC company had an asset with carrying amount of $44,000 at end of year 2019, and at the same date the company determined the fair value for that asset with $47,000 and its value in use with 42,000
Plz I am on exam
If ABC company had an asset with carrying amount of $44,000 at end of year 2019, and at the same date the company determined the fair value for that asset with $47,000 and its value in use with 42,000.
Required: compute the impaired loss (if it found).
Expert Solution
Carrying Amount of Asset = $44,000
Recoverable amount = Higher of (Fair Value less cost of disposal or value in use)
= Higher of ($47,000 or $42,000)
= $47,000
An impairment loss is recognized when carrying amount of an asset is more than its recoverbale amount. It is calculated as :
Impairment loss = Carrying Amount - Recoverable Amount
Ans : Since the Carrying amount is less than the recoverable amount, no impairment loss will be recognized.
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