Reference no: EM133091490
Question - Night Corp. has identified circumstances that warrant impairment testing on a depreciable asset.
The following information is available at December 31, 2020 about the depreciable asset:
Equipment $60,000
Accumulated depreciation -15,000
Carrying value $45,000
Undiscounted future cash flows from use of asset $43,000
Value in use: discounted cash flows 37,500
Fair value 42,000
Costs of disposal -2,000
Remaining useful life 5 years
Required -
a) Prepare any impairment loss journal entries required under IFRSs and under ASPE.
b) Can impairment losses subsequently be reversed under IFRS? ASPE?
c) Assume the depreciable asset was sold February 1, 2021 for $36,000. Prepare all the necessary journal entries on February 1, 2021 to record this sale assuming IFRS is applied.
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