Reference no: EM132515497
Question - Cougar Corp.'s balance sheet includes the following asset:
Equipment $95,000
Less: accumulated depreciation (25,000)
Book value (carrying amount) $70,000
After performing its annual review for impairment, Cougar obtains the following data:
Asset's value in use $58,000
Fair value less disposal costs 62,000
Required - Assuming Cougar uses the rational entity impairment model,
a) Calculate the recoverable amount.
b) Calculate the impairment loss.
c) Prepare the entry to record the impairment loss.
d) Briefly explain the term "value in use".