Financial Statements .... Help

sgafo

Could someone help me with this question, please ?

Financial Statements

Dahir Ahmed

Hi
If the carrying amount of an asset exceeds it's recoverable amount, the asset is considered to be impaired.

The recoverable amount is the higher amount of an asset's fair value less costs to sell and it's value in use.

First, figure out the recoverable amount for each option and then compare that amount to the respective carrying amount.

sgafo

could anyone please explain it to me in numbers

SandyHood

IAS 36 Impairment of Assets

sgafo

Have you studied: IAS 36 Impairment of Assets?

If your answer in NO then go and study it.

For now look at the 4 assets
If the recoverable amount is lower than the carrying value then you should impair the asset to bring its carrying value in line with the recoverable amount.
i recoverable value £14,000 is more than carrying amount No impairment
ii recoverable value £9,000 is more than carrying amount No impairment
iii recoverable value £7,200 is more than carrying amount No impairment
iv recoverable value £5,200 is lower than the carrying amount Impaire by the difference between carring amount and recoverable value £3,800