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IFRS Ch. 12 Problem - Required A Determine the amount of...

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IFRS Chapter 11/12  Try the following problem:     IFRS – Practice Problem – CH. 12   Rockwell Enterprises operates several restaurants throughout the Midwest.   Three of its restaurants located in the center of a large urban area have  experienced declining profits due to a decline in the population.  The company’s  management  has decided to test the operational assets of the restaurant for  possible impairment.  The relevant information for these assets is presented  below:        Book Value -                                                        $6.5 million        Estimated undiscounted sum of future cash flows    $4.0 million        Fair value -                                                          $3.5 million
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Unformatted text preview: Required: A) Determine the amount of the impairment loss, if any. B) Repeat requirement A assuming that the estimated undiscounted sum of future cash flows is $6.8 million and fair value is $5 million. C) How might this situation differ if Rockwell Enterprises prepares its financial statements according to the International Accounting Standards? Assume that fair value amount given in the exercise equals both (1) the fair value less costs to sell and (2) the present value of estimated cash flows. Review the Solution after you have completed the problem....
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