An entity purchases all the shares of a haulage company for $50,000 on 1 January 20X0. The operation consists of an operating licence with a fair value of $10,000 and 5 wagons each with a fair value of $6000. On 5 January 20X0, one of the wagons crashed and the insurance company refused to pay out due to the non-disclosure of certain material facts. The wagon was a write-off. The adverse publicity and operating capacity reduction, reduced the recoverable amount of the business to $25,000. This amount includes the operating license which had a fair value less costs to sell of $9,500. What is the carrying amount of the assets after accounting for the impairment losses under IAS 36 Impairment of Assets?

An entity purchases all the shares of a haulage company for $50,000 on 1 January 20X0. The operation consists of an operating licence with a fair value of $10,000 and 5 wagons each with a fair value of $6000. On 5 January 20X0, one of the wagons crashed and the insurance company refused to pay out due to the non-disclosure of certain material facts. The wagon was a write-off. The adverse publicity and operating capacity reduction, reduced the recoverable amount of the business to $25,000. This amount includes the operating license which had a fair value less costs to sell of $9,500. What is the carrying amount of the assets after accounting for the impairment losses under IAS 36 Impairment of Assets?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 4P

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