Financial Statements 1.5E Practice paper one, is my answer correct?
Deaniedani
Registered Posts: 26
I know the answer was £1,200, so I took the carrying amount of £19,600 away from the value in use of £1,800 and got the answer £1,200. Did I do that correctly? If not could someone please help me.
0
Comments
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Yes.
Recoverable Amount is the higher of Fair Value less Cost of Disposal', or 'Value in Use'
Fair value less Cost of Disposal = 18,200
Value in Use = 18,400
Impairment exists if Carrying Amount is greater than Recoverable Amount, and to write it down would reduce 19,600 to 18,400
Amount of Impairment = 1,200
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