Mercury Limited had decided to dispose of an operation and the operation includes allocated goodwill as follows at 12-31-2019:

                                                                                                   

The fair value of the net assets of the operation at 12-31-2019 was $40,000 (in thousands) and the estimated costs of selling the company were $1,000 (in thousands).

Requirements:

Assumed that the transaction met the criteria for IFRS 5,

1. Indicate whether the disposal group has impairment at 12-31-2019.
2. If impaired, determine the allocated amount of impairment to each of the account in the disposal group on 12-31-2019
3. Prepare the entries, if any, on 12-31-2019.
4. Determine the depreciation amount, if any , on 12-31-2020.

Transcribed Image Text:

$'000 Goodwill 1,300 equipment - cost (remaining life 4 years, SL depreciation with no Residual Value) 11,200 Buildings - revaluation (remaining life 5 years, SL depreciation with no Residual value ) 10,800 Inventory 9,000 Trade receivables 10,400 Trade payables (1,200) Total 41,500 $'000 Goodwill 1,300 equipment - cost (remaining life 4 years, SL depreciation with no Residual Value) 11,200 Buildings - revaluation (remaining life 5 years, SL depreciation with no Residual value ) 10,800 Inventory 9,000 Trade receivables 10,400 Trade payables (1,200) Total 41,500

Answer rating: 100% (QA)

As per IFRS 5 post tax gain or loss on disposal of discontinued operation has ... View the full answer