Answer:
1. the printing equipment is Impaired
2. Journal
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
3. Journal
Accumulated Depreciation $554,000 (debit)
Accumulated Impairement Loss $146,000 (debit)
Printing Equipment (credit) $700,000
Explanation:
Impairement Loss (IAS 36) happens when the Carrying Amount of an Asset Exceeds its Recoverable Amount.
<u>Carrying Amount Calculation</u>
Carrying Amount = Cost - Accumulated Depreciation
= $752,000 - $554,000
= $198,000
<u>Recoverable Amount Determination</u>
Recoverable amount of an asset is the Higher of :
- Value in Use or
- Fair Value Less Cost to Sell
Only the fair value is provided, hence Recoverable amount is $52,000
<u>Analysis for Impairment loss</u>
Carrying Amount $198,000 > Recoverable amount $52,000
Therefore the printing equipment is Impaired
Impairement Loss $146,000 (debit)
Accumulated Impairement Loss $146,000 (credit)
