Innovative Incorporated has a piece of equipment with a carrying amount of $ 175,000. Technology has changed, indicating that the machine may be impaired. A new machine with updated technology could be purchased for $ 350,000. A used machine of similar vintage is listed on Kijiji for $ 160,000. The estimated discounted cash flows from continuing to use the asset are $ 148,000. The undiscounted cash flows from the use of the asset are $ 180,000. The estimated value if the company sold the asset less commission costs is $ 155,000.

1. What value would be used to compare with the carrying amount to determine if there is impairment?
2. What is the amount of impairment?

  • CreatedFebruary 17, 2015
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