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Determine and record the impairment loss

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Reference no: EM133327609

Case: A business has acquired an asset on January 1, 2020, and used the straight-line method to depreciate it. On December 31, 2023, it decided to test it for impairment and give the following information:

The asset's original cost is $600,000. The useful life is 8 years. The residual value of the asset is $30,000. The fair value is $200,000. The costs to sell is $9,000. The discounted future cash flows generated by the asset is $250,000 and the undiscounted future cash flows generated by the asset $345,000.

Question: Determine and record the impairment loss on this asset to be recorded on December 31, 2023 if IFRS is used.

Secondly: In 2024, the recoverable amount of the asset is: $150,000. Determine and record the impairment if the straight-line of depreciation is used.

Reference no: EM133327609

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