Page 39 - FINAL CFA I SLIDES JUNE 2019 DAY 8
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Session Unit 8:
29. Long-lived Assets
LOS 29.i: Explain the impairment of property, plant, and
equipment and intangible assets, p.224
IFRS
Original cost = $900,000
Less Acct depr = -$100,000
Carrying value= $800,000
Recoverable amount (greater of Value in
tanties $760,000
use and FV less selling costs)
FV less selling costs = $790,000-$30,000 =
Value in use $785,000 –greater!
US GAAP Write-off $15,000 to income statement
• Not impaired
• Because expected future cash flows ($825,000> Carrying value ($800,000))
Assuming Brownfield will continue to use the equipment, test the asset for impairment under both IFRS and U.S.
GAAP and discuss the results
