Reference no: EM132614279
On January 1, 2020, KAZOO COMPANY acquired a factory equipment at a cost of P150,000. The equipment is being depreciated using the straight-line method over its projected useful life of 10 years. On December 31, 2021, a determination was made that the asset's recoverable amount was only P96,000. Assume that this was properly computed and that recognition of the impairment was warranted. On December 31, 2022, the asset's recoverable amount was determined to be P111,000 and management believes that the impairment loss previously recognized should be reversed. You have been asked to assist the company's accountant in the application of PAS 36, the standard on impairment of assets.
Question a. What amount of impairment loss should be recognized on December 31, 2021?
Question b. What is the asset's carrying value on December 31, 2022?
Question c. What would have been the asset's carrying amount at December 31, 2022, had the impairment not been recognized in 2021?
Question d. What amount of impairment recovery should be reported in the 2022 income statement?
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