Answer:
For the year ended December 31, 2021, Tango would report:
Fair value of the assets = $40 million
Carrying Amount = $48 million
lower of the 2 values is fair value, which would reduce the carrying amount and result in impairment of $8 million which would be recognized in the income statement.
This expense is recognized in the income statement + pre-tax loss
= $8 million + $10 million = $18 million
less tax(25%) = $4.5 million
Total loss from discontinued operation = $18 million - $4.5 million = $13.5 million
Explanation:
As at December 31, 2021, the Division's assets were considered held for sale.
Therefore, the assets should be measured at the lower of carrying amount and fair value less costs to sell (IFRS 5 -Non-current Assets Held for Sale and Discontinued Operations) with a recognition of any arising impairment.
Any impairment loss that arises by using the measurement principles in IFRS 5 must be recognized in profit or loss.
