Financial Statements - Sample Assessment 1

sabina

Can anyone help on task 1.5 - part (C)?

jglover

Assets should be recognised at the lower of the carrying amount or recoverable amount. Both recoverable amounts must be lower than the carrying amount for an asset to be impaired and the asset is then valued at the higher of fair value less costs to sell £7,800 (8,000 - 200) or value in use £9,000. Therefore the machine has been valued at the higher of the recoverable amounts - £9,000.

sabina

I dont think we're both looking at the same question? This is the one about AVCO?

jglover

Sorry I answered in relation to AQ2016 and I see your query is regarding AQ2013. However, I have looked at Financial Statements Sample Paper 1 Task 1.5 part c and it asks for the net cash generated from operating activities not a calculation regarding AVCO???