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 .

Comments

  • CheesypeesyCheesypeesy MAAT Posts: 96
    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 and F2, studying E2.
  • AlaaAlaa Registered Posts: 26
    Thank you I got it .
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