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Compute for the impairment loss

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On December 31, 20x1, ABC Co. assessed that its plant with carrying amount of 38,000,000 in impaired . ABC Co. made the following cash flow projections from net revenues to be derived from the plant:

Year              Cash flows

20x2                12,000,000

20x3                10,000,000

20x4                9,000,000

20x5                8,000,000

  • The cash flows are assumed to be made at each year-end. The appropriate discount rate is 12%. The fair value less costs of disposal of the plant is 30,000,000. The plant has a remaining useful life of 25 years and a residual value of 2,000,000.

Requirements:

Question 1: Compute for the impairment loss.

Reference no: EM132526050

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