Reference no: EM132506858

Presented below is information related to equipment owned by Urithiru Industries at December 31, 2020:

Cost: $100,000
Accumulated Depreciation to date: $64,000
Undiscounted expected net future cash flows: $28,000
Value of a very similar asset traded in the market: $24,000
Estimated disposal costs: $2,000

Question 1: What is the amount of impairment loss to be recorded at 12/31/2020 assuming the asset is being held for sale?

Question 2: What is the amount of impairment loss to be recorded at 12/31/2020 assuming the asset is being will be held for use in the future

• As of December 31, 2020, the equipment had a salvage value of $4,000 and is expected to produce 100,000 additional units over its remaining useful life. Urithiru uses an activity-based depreciation method and the equipment produced 24,000 units in 2021. At December 31, 2021, the fair value of the equipment is $16,000 and the undiscounted expected future net cash flow is $18,000.

Question 3: How much impairment loss or loss recovery would be recognized at 12/31/2021?