8. At the beginning of 2020, Howie Company acquired an intangible asset for P3,000,000. The intangible asset has an estimated useful life of ten(10) years. At year-end, Dec. 31, 2020, the intangible asset was evaluated to determine whether it was impaired. On the same date, the fair value less cost of disposal of the intangible asset is P2,500,000. The asset is expected to generate future cash flows of P300,000 annually for the remaining nine(9) years. The appropriate discount rate is 5%. What is the impairment loss to be recognized for 2020?

8. At the beginning of 2020, Howie Company acquired an intangible asset for P3,000,000. The intangible asset has an estimated useful life of ten(10) years. At year-end, Dec. 31, 2020, the intangible asset was evaluated to determine whether it was impaired. On the same date, the fair value less cost of disposal of the intangible asset is P2,500,000. The asset is expected to generate future cash flows of P300,000 annually for the remaining nine(9) years. The appropriate discount rate is 5%. What is the impairment loss to be recognized for 2020?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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