At the end of 2020, Blue Spruce Corporation owns a licence with a remaining life of...

 

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At the end of 2020, Blue Spruce Corporation owns a licence with a remaining life of 10 years and a carrying amount of $525,000. Blue Spruce expects undiscounted future cash flows from this licence to total $531.000. The licence's fair value is $419.700 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $470,900. Blue Spruce prepares financial statements in accordance with IFRS. Determine if the licence is impaired at the end of 2020. The licence v at the end of 2020. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Assume the recoverable amount is calculated to be $442,300 at the end of 2021. Determine if the licence is impaired at the end of 2021. The licence at the end of 2021. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit At the end of 2020, Blue Spruce Corporation owns a licence with a remaining life of 10 years and a carrying amount of $525,000. Blue Spruce expects undiscounted future cash flows from this licence to total $531.000. The licence's fair value is $419.700 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $470,900. Blue Spruce prepares financial statements in accordance with IFRS. Determine if the licence is impaired at the end of 2020. The licence v at the end of 2020. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Assume the recoverable amount is calculated to be $442,300 at the end of 2021. Determine if the licence is impaired at the end of 2021. The licence at the end of 2021. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Answer rating: 100% (QA)

1 Impairment Loss Carrying amountRecoverable amount Carrying amount Book value of the asset after de... View the full answer