Agora Corporation, a private Canadian entity using ASPE, has factory equipment that has a cost of $5,000,000 and accumulated depreciation of $1,200,000. A change of operations has resulted in this equipment not being fully utilized. A review indicates that future net cash inflows from its use will be approximately $3,000,000 undiscounted and $2,800,000 discounted. The current market value of similar equipment is about $2,400,000. 

Required 

a) Determine if there is an asset impairment. Explain your reasoning. 

b) Assuming that there is an impairment, determine the amount of impairment and provide the journal entry to record the impairment. 

c) In the subsequent year, the market value increases to $3,200,000. What action, if any, should Agora take with respect to the accounting for this equipment? Explain your answer

Answer rating: 100% (QA)

Momenty PAGE DATE a Yes there is an 2set impairment an ... View the full answer