Reference no: EM132592226

Question 1: Gibbon Corp., a Canadian public corporation, owns equipment for which the following year-end information is available:

Carrying amount (book value)$59,000

Recoverable amount52,000

Fair value less disposal costs55,000

Which of the following best describes the proper accounting treatment for Gibbon's equipment?

Option 1: It is not impaired and a loss should not be recognized.

Option 2: It is impaired and a loss must be recognized, with no reversal possible.

Option3: It is not impaired, but a loss must be recognized.

Option 4: It is impaired and a loss must be recognized, but the loss but may be reversed in future periods.