What would be the amount of the impairment loss

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Reference no: EM132553900

Peter, an analyst is studying the long-lived assets, non-current liabilities and earnings quality of "Storage and Logistics" (S&L), a company based in Luxembourg that follows IFRS. Concerning PPE assets, he gathers the following data from financial statements and other relevant disclosures in 2014. The Fair value is 33 million Euros; Costs to Sell are 0.8 million Euros; Value in Use is 30 million Euros; Net Carrying Amount is 39 million Euros (before current year impairment). Peter uses these values to check he understands the impairment loss appearing on the income statement in the current year.

Concerning non-current liabilities, S&L issued 2,000 ?ve-year debentures with a coupon rate of 8.0 percent paid semi-annually and a face value of 1,000 Euros. At the time of issuance the market interest rate is 9.0 percent. Investors paid 960.44 Euros for each debenture. There were no issuance costs.

Required:

Question (a) What would be the amount of the impairment loss on S&L's income statement related to its PPE assets in the current year?

Question (b) Determine the carrying value of the bonds using the effective interest rate method of amortization after 18 months

Reference no: EM132553900

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