Page 32 - FINAL CFA I SLIDES JUNE 2019 DAY 8

Session Unit 8:

29. Long-lived Assets
LOS 29.i: Explain the impairment of property, plant, and
equipment and intangible assets, p.224

(CV > Recoverable Amount
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 =

CV > than its future undiscounted cash flows: Value in use $785,000 –greater!
US GAAP Write-off $15,000 to income statement

• Not impaired
• 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