MGT131Ahw7 - 220000 Impairment loss 220000 A/D 220000(b...

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E11-17 (a) COST 9000000 ACCUMULATED DEPR 1000000 EXPECTED FUTURE CASH FLOWS (UNDISCOUNT 7000000 FAIR VALUE LESS COST TO SELL 4380000 NBV 8000000 FV - Cost of sale 4380000 Impairment loss 3620000 Impairment loss 3620000 A/D 3620000 (b) As the item is being desposed of Pujol's does not depriciate it. Assets  held for disposal are like inventory; companies should report them at  the lower of cost or net realizable value. © Carrying value 4380000 FV - Cost of sale 5080000 Impairment gain 700000 A/D 700000 Recovery of Impairment los 700000 E11-18 COST 900000 ACCUMULATED DEPR 400000 EXPECTED FUTURE CASH FLOWS (DISCOUNTED) EXPECTED FUTURE CASH FLOWS (UNDISCOUNT 300000 FAIR VALUE  280000 (a) NBV 500000 FAIR VALUE  280000 Impairment loss
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Unformatted text preview: 220000 Impairment loss 220000 A/D 220000 (b) Impairment losses should be reported as a part of continuing operations under other expenses and losses c) future use. (according to GAAP) No recovery of impairments are needed when the fair value is equal or higher to the carrying value of an asset which is intended for (d) They recorded an impairment loss when FV was 280000 but when it rose to 300000 they could not increase the value of the asset as it is intended for future use. The accounting issues here were to establish the fair value of the asset as the fair value is constantly changing....
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MGT131Ahw7 - 220000 Impairment loss 220000 A/D 220000(b...

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