Cash-generating unit (adopted from Wiley publication) Sydney Ltd reported the following assets in its statement of financial position at 30 June 2020: Assets Carrying Amount Plant $570 000 Land 300 000 Patent 240 000 Office equipment 280 000 Inventory 400 000 $1 790 000 The recoverable amount of the entity was calculated to be $1 660 000. The fair value less costs of disposal of the land was $280 913. Required: Prepare the journal entry for any impairment loss at 30 June 2020. Answer: Carrying amount of assets = Recoverable amount = Impairment loss = Assuming the inventory is carried at the lower of cost and net realisable value, the allocation of the impairment loss will not involve both cash and inventory
Cash-generating unit (adopted from Wiley publication)
Sydney Ltd reported the following assets in its
|
Assets |
Carrying Amount |
|
Plant |
$570 000 |
|
Land |
300 000 |
|
Patent |
240 000 |
|
Office equipment |
280 000 |
|
Inventory |
400 000 |
|
|
$1 790 000 |
The recoverable amount of the entity was calculated to be $1 660 000. The fair value less costs of disposal of the land was $280 913.
Required:
Prepare the
Answer:
Carrying amount of assets =
Recoverable amount =
Impairment loss =
Assuming the inventory is carried at the lower of cost and net realisable value, the allocation of the impairment loss will not involve both cash and inventory
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