Aphrodite Co has a year-end of 31 December and operates a factory which makes computer chips for mobile phones.
It purchased a machine on 1 July 20X3 for $80,000 which had a useful life of ten years and is depreciated on the
straight-line basis, time apportioned in the years of acquisition and disposal.
The machine was revalued to $81,000 on 1 July 20X4.
There was no change to its useful life at that date.
A fire at the factory on 1 October 20X6 damaged the machine leaving it with a lower operating capacity.
The accountant considers that Aphrodite Co will need to recognize an impairment loss in relation to this damage.
The accountant has ascertained the following information at 1 October 20X6:
(1) The carrying amount of the machine is $60,750.
(2) An equivalent new machine would cost $90,000.
(3) The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount
to $2,000.
(4) In its current condition, the machine could operate for three more years which gives it a value in use figure of
$38,685.
Calculate the total impairment loss associated with Aphrodite Co machine at 1 October 20x9
Aphrodite Co has a year-end of 31 December and operates a factory which makes computer chips for mobile phones.
It purchased a machine on 1 July 20X3 for $80,000 which had a useful life of ten years and is depreciated on the
straight-line basis, time apportioned in the years of acquisition and disposal.
The machine was revalued to $81,000 on 1 July 20X4.
There was no change to its useful life at that date.
A fire at the factory on 1 October 20X6 damaged the machine leaving it with a lower operating capacity.
The accountant considers that Aphrodite Co will need to recognize an impairment loss in relation to this damage.
The accountant has ascertained the following information at 1 October 20X6:
(1) The carrying amount of the machine is $60,750.
(2) An equivalent new machine would cost $90,000.
(3) The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount
to $2,000.
(4) In its current condition, the machine could operate for three more years which gives it a value in use figure of
$38,685.
Calculate the total impairment loss associated with Aphrodite Co machine at 1 October 20x9
