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Original cost of machine 22000 carrying cost of machine 20000 undiscounted future cash flow from machine 18000 fair value of future cash flow 12000

the carrying cost of machine after recognition of impairment is 

A-22000

B-20000

C-18000

D-12000

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Question added by Ahmed kandil , Cost Controller , Battour Holding Cpompany
Date Posted: 2015/03/13
Muhammad Ramzan Tufail  ACCA
by Muhammad Ramzan Tufail ACCA , Assistant Finance Manager , Eltizam Asset Management Group

Under U.S GAAP, if the carrying value of long lived assets are greater than the sum of undiscounted future cash flows, then the entity should record the impairment expense for the difference between the carrying value and the fair value of the long lived asset. So, in this Question, Impairment expense is20,000-12,000 =8,000

Therefore the carrying value after recognition of impairment is20,000-8,000 = 12,000

D is the Ans.

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