Question 3
12 points " Saved
a) Calculate and explain if there is any impairment that exists on this product line? (6)
Product CDC
Original cost: $5,200,000
Accumulated depreciation: $2,100,000
Fair value: $4,500,000
Costs to sell: $500,000
Value in use: $4,300,000
b) Calculate and explain what is the recoverable amount for this product line? (6)
Product BGF
Original cost: $10,200,000
Accumulated depreciation: $6,100,000
Fair value: $6,500,000
Costs to sell: $1,500,000
Value in use: $4,000,000
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