Question 3
a) Calculate and explain if there is any impairment 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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