How should the property be treated in the financial statements of the hospital? The property should be treated as a non-cash-generating asset and subject to an impairment review under IPSAS 21 Impairment of Non-Cash-Generating Assets. The property should be treated as a cash generating asset and subject to an impairment review under IPSAS 26 Impairment of Cash-Generating Assets. O The property should be revalued under IPSAS 17 Property, Plant and Equipment. The property should be held at its current market value.
How should the property be treated in the financial statements of the hospital? The property should be treated as a non-cash-generating asset and subject to an impairment review under IPSAS 21 Impairment of Non-Cash-Generating Assets. The property should be treated as a cash generating asset and subject to an impairment review under IPSAS 26 Impairment of Cash-Generating Assets. O The property should be revalued under IPSAS 17 Property, Plant and Equipment. The property should be held at its current market value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A hospital owns a property that was originally acquired for £5m. The property is
occupied by staff of the hospital providing services. The property is held at cost less
accumulated depreciation and the current carrying value is £3.5m. There has recently
been a significant decline in property prices in the área.
How should the property be treated in the financial statements of the hospital?
The property should be treated as a non-cash-generating asset and subject to an
impairment review under IPSAS 21 Impairment of Non-Cash-Generating Assets.
The property should be treated as a cash generating asset and subject to an
impairment review under IPSAS 26 Impairment of Cash-Generating Assets.
The property should be revalued under IPSAS 17 Property. Plant and Equipment.
The property should be held at its current market value.
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