A company owns a piece of
equipment with a net cost of $30,000 (cost of $50,000 net of
accumulated depreciation of $20,000). There are indicators that
this equipment is impaired. The expected net future undiscounted
cash flows are $31,000. The expected net future discounted cash
flows are $28,000. The fair value of the equipment is $25,000 and
selling costs are minimal.
A. What is the impairment loss
for the company using US GAAP? Provide the journal entry to
record the impairment loss, if any.
B. What is the impairment loss
using IFRS? Provide the journal entry to record the
impairment loss, if any.