Impairment loss

Hi , I don’t know why did they calculate the impairment loss in this question as the carrying amount is less than the present value .


  • CheesypeesyCheesypeesy Posts: 102MAAT
    edited March 20
    When impairing, you compare the carrying amount to the recoverable amount. This is the higher of fair value less costs of sale (£13,000,000 - £1,400,000 = £11,600,000) and value in use (£11,900,000). In this case it's the value in use.

    The carrying amount is £600,000 higher than the recoverable amount, so this is the amount to impair.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • AlaaAlaa Posts: 30Registered
    Thank you I got it .
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