Dept. of Agriculture determines an indication that its investment property purchased on Jan.1 2005 might be impaired starting Jan. 1, 2008. The entity gathers the followinginformation:Carrying amount of investment propertyP1,200,000Fair value less cost to sel990,000Value in Use800,000Residual value5%Following the impairment, DA revises its remaining useful life to 12 years. Compute for the following:Six years after the impairment, D.A. determines an indication that the impairment may no longer exist. The investment property would have a carrying amount of P650,000 by now.Compute for the following:c) Carrying amount as of Dec 31, 2013d) Gain on the reversal of the impairment

When a company helds a property as investment property , as per standard…

Answered: Dept of Agriculture determines an…

Dept of Agriculture determines an indication that its investment property purchased on Jan 1 2005 might be impaired starting Jan. 1. 2008. The entity gathers the fol

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

Dept. of Agriculture determines an indication that its investment property purchased on Jan.1 2005 might be impaired starting Jan. 1, 2008. The entity gathers the following
information:
Carrying amount of investment property
P1,200,000
Fair value less cost to sel
990,000
Value in Use
800,000
Residual value
5%
Following the impairment, DA revises its remaining useful life to 12 years. Compute for the following:
Six years after the impairment, D.A. determines an indication that the impairment may no longer exist. The investment property would have a carrying amount of P650,000 by now.
Compute for the following:
c) Carrying amount as of Dec 31, 2013
d) Gain on the reversal of the impairment

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