 # an asset's recoverable amount is equal to

Recoverable amount is the amount of asset's fair value less net selling price or the value in use whichever is higher. The recoverable amount of the office building is \$7,270,000 because value in use (present value of expected cash flows) is higher than the fair value of \$6,650,000 (\$7,000,000 - … An asset's recoverable amount is equal to: An asset's carrying amount is £25,000. [IAS 36.66] If it is not possible to determine the recoverable amount (i.e. The latter is the present net worth of the asset or cash-generating unit (CGU). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If it is determined that an asset is impaired, the amount of the impairment is equal to the difference between the carrying amount of the long-lived asset and the Fair Value of the asset. to the firm. below for more details). If an entity uses a ‘free . Example A loss on impairment of an indefinite - life intangible asset is the difference between the asset's A. recoverable amount and the expected future net cash flows B. carrying amount and its recoverable amount O c. book value and its fair value OD. recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If there is a strong indication that the recoverable amount will drop significantly, the asset impairment test must be performed. Recoverable amount should be determined for the individual asset, if possible. Successive revaluations. 2 (refer to the section on . Amount (CA) and the Recoverable Amount (RA) of a CGU in an IAS 36 impairment calculation. This basic accounting equation “balances” the company’s balance sheet, showing that a company’s total assets are equal to the sum of its liabilities and shareholders’ equity. An asset's recoverable amount is equal to: A non-current asset held for sale should be measured at: As per IFRS 5 an entity shall measure a non-current asset (or disposal group) classified as held for sale at ., which one of the following? cash flow. If the company intends to sell the asset, the recoverable amount is equal to its fair value less the cost of disposal. Note: If the fair value of an asset less its cost of disposal, or the asset's value in use is greater than its carrying amount, then calculating a recoverable amount is not necessary since the asset is not impaired. There is an impairment loss of: How often should goodwill acquired in a business combination be tested for impairment? Its fair value less costs of disposal is £15,000 and its value in use is £19,000. Under IAS 36, the recoverable amount is the higher of the asset’s fair value less cost to sell and its value in use. An asset's carrying amount is SR25,000. 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