Reference no: EM132696358
SC Corporation plans to dispose of a group of net assets that form part of a disposal group. The net assets at December 31, 2020 are:
-----------------------------------------------------------------------Carrying Value at December 31, 2020
Goodwill ----------------------------------------------------------------------- 6,000,000
Property, Plant and Equipment ---------------------------------------------18,000,000
Inventory------------------------------------------------------------------------10,000,000
Financial Assets (profit of P2,000,000 recognized in equity) ---------7,000,000
Financial liabilities ------------------------------------------------------------( 4,000,000)
Total ----------------------------------------------------------------------------P37,000,000
Before the date of reclassification, the property, plant and equipment had a fair value of P16,000,000, the inventory has a net realizable value of P9,000,000. The fair value less costs to sell of the disposal group is P25,000,000.
Problem 1: What amount of the impairment loss is allocated to the property, plant, and equipment?
Group of answer choices
Option 1: P3,000,000
Option 2: None
Option 3: P9,000,000
Option 4: P6,000,000