Page 63 - FR Integrated Workbook 2018-19
P. 63
Impairment of assets
Example 4 cont.
Carrying Impairment Recoverable
amount amount
$000 $000 $000
Machinery 500 125 2 375
Goodwill 180 180 1 –
Land and buildings 900 225 2 675
Brand – – –
Other net assets 120 – 120
––––– ––––– –––––
Total 1,700 530 1,170
––––– ––––– –––––
Remaining impairment of $350k is allocated between Machinery and Land
and buildings. Total carrying amount for these assets is $1,400k (500k +
900k), so each asset category is impaired by 350 / 1,400 of its carrying amount.
Machinery: 500 × 350 / 1,400 = $125k
Land and buildings: 900 × 350 / 1,400 = $225k
Illustrations and further practice
For homework try TYU question 3 from Chapter 4 of the Study Text.
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