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Semenov [28]
3 years ago
13

Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, th

e discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?
Business
2 answers:
ira [324]3 years ago
7 0

Answer:

$0

Explanation:

According to US GAAP the reduction in the value of the asset due to a decrease in the fair value. It means when fair value of the asset is reduced than the book value of the asset.

Amortized Cost / Book value = $50,000

Market Value = $53,000

Discounted Value = $51,000

There is no Impairment loss on this asset as the fair market value is more than the book value of the asset.

FrozenT [24]3 years ago
3 0

Answer:

Nil, asset is not impaired.

Explanation:

An asset is said to be impaired if and only if the carrying amount of the asset is more than the recoverable amount.

The recoverable amount is the higher of the value in use (which is the discounted expected future cash flows) and the fair value less cost to sell.

Recoverable amount = $53,000 (being the higher of the selling price and the discounted expected future cash flow)

Since this is higher than the carrying value of the asset, it is not impaired.

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