Find how much impairment loss should be recognized

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Green Corporation spent P1,000,000 on equipment eight years ago. The equipment was depreciated using the straight-line approach, with a useful life of 20 years and a residual value of 10%. The firm's operations have suffered substantial losses over the last two years; therefore, the firm has determined that the equipment should be examined for potential impairment.

The corporation's management estimates that the equipment has a remaining usable life of 7 years. The net cash inflow from the equipment has a PV of P220,000. The equipment has a fair value of P240,000.

Problem 1: Determine how much impairment loss should be recognized.

Reference no: EM133003490

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