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On January 2, 2010, WLP Corp purchased equipment that produced akey product for smartphones. That equipment cost $60,000, and itsestimated useful life was five years, and after which it expectedto be sold for $5,000. WLP Corp uses straight-linedepreciation.
At the end of 2012, an accountant in WLP Corp is studying theimpairment of the equipment. The demand for the product hasdeclined substantially since the introduction of cheaper imports.She gathers the following Information about the equipment
Carrying amount = $27,000
Undiscounted expected Future CFâs = $27,500
Present value of expected future CFâs = $24,000
Fair Value if Sold = $25,500
Cost to Sell = $3,000
Under IFRS, is the equipment impaired? If so, determine theamount of the gain or loss on the asset impairment. (clearlyindicate gain or loss)
(NOT IMPAIRED)
Under U.S. GAAP, is the equipment impaired? If so, determine theamount of the fain or loss on the asset impairment. (Clearlyindicate gain or loss)
On January 2, 2010, WLP Corp purchased equipment that produced akey product for smartphones. That equipment cost $60,000, and itsestimated useful life was five years, and after which it expectedto be sold for $5,000. WLP Corp uses straight-linedepreciation.
At the end of 2012, an accountant in WLP Corp is studying theimpairment of the equipment. The demand for the product hasdeclined substantially since the introduction of cheaper imports.She gathers the following Information about the equipment
Carrying amount = $27,000
Undiscounted expected Future CFâs = $27,500
Present value of expected future CFâs = $24,000
Fair Value if Sold = $25,500
Cost to Sell = $3,000
Under IFRS, is the equipment impaired? If so, determine theamount of the gain or loss on the asset impairment. (clearlyindicate gain or loss)
(NOT IMPAIRED)
Under U.S. GAAP, is the equipment impaired? If so, determine theamount of the fain or loss on the asset impairment. (Clearlyindicate gain or loss)
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Deanna HettingerLv2
28 Sep 2019
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