A company has bottling equipment which cost $77 million, has a net book value of $4 million, estimated future cash flows of $3.3 million, and a fair valueof $2.7 million.How much is the asset impairment loss?Multiple Choice$5.00 million$0.70 million.$4.00 million,$1.30 million.

Impairment loss is incurred when the recoverable amount of the asset is less than the carrying…

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How much is the asset impairment loss? Multiple Choice O $5.00 million $0.70 million. $4.00 million $1.30 million

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

A company has bottling equipment which cost $77 million, has a net book value of $4 million, estimated future cash flows of $3.3 million, and a fair value
of $2.7 million.
How much is the asset impairment loss?
Multiple Choice
$5.00 million
$0.70 million.
$4.00 million,
$1.30 million.

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