PPE of an entity was damaged due to a fire accident on 1 September 2014. the accident has caused a drastically drop in the efficiency of the PPE that wouldn’t happen in normal usage. The management is considering to recognize impairment loss for the damages occurred due to the accident. Following are the details that existed as on 1 September 2014: The carrying amount of PPE in the books of the entity stood OMR 121,500. The same type of new PPE would cost OMR 180000. The PPE could be sold for a gross amount of OMR 90,000 with dismantling cost of OMR 2000 and legal charges of OMR2000. The present values of future cash flow from the PPE if continued to be used for next three years would be OMR77370. The total impairment loss recognized for PPE as at 1st September 2014 would be; A.OMR 44130 B.OMR 35500 C.OMR 31500 D.No impairment
PPE of an entity was damaged due to a fire accident on 1 September 2014. the accident has caused a drastically drop in the efficiency of the PPE that wouldn’t happen in normal usage. The management is considering to recognize impairment loss for the damages occurred due to the accident. Following are the details that existed as on 1 September 2014:
The carrying amount of PPE in the books of the entity stood OMR 121,500.
The same type of new PPE would cost OMR 180000.
The PPE could be sold for a gross amount of OMR 90,000 with dismantling cost of OMR 2000 and legal charges of OMR2000.
The present values of future
The total impairment loss recognized for PPE as at 1st September 2014 would be;
A.OMR 44130
B.OMR 35500
C.OMR 31500
D.No impairment
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