ompany which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.
ompany which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is:
a)14,000
b)17,000
c)22,000
In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.
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