B. A company has acquired a machine at a cost of Rs. 10,00,000 in 2016. The...

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B. A company has acquired a machine at a cost of Rs. 10,00,000 in 2016. The company charges depreciation on straight line basis at 10%. The useful life of machine is 10 years. At the end of 2016, the recoverable amount of the machine was Rs.750,000 causing an impairment loss. After 5 years of use, due to the technological change, the recoverable amount of the machine was 560,000 causing a reversal of impairment loss. You are required to show how these transactions will be treated in the financial statements. (10+10) Keeping in view the IAS-36, calculate the recoverable amount and impairment loss in each case: Items Carrying Value Fair Value Value in Use Selling Cost A 100,000 110,000 120,000 5,000 B 150,000 125,000 130,000 2,000 C 120,000 100,000 90,000 3,000 D 150,000 130,000 120,000 4,000 B. A company has acquired a machine at a cost of Rs. 10,00,000 in 2016. The company charges depreciation on straight line basis at 10%. The useful life of machine is 10 years. At the end of 2016, the recoverable amount of the machine was Rs.750,000 causing an impairment loss. After 5 years of use, due to the technological change, the recoverable amount of the machine was 560,000 causing a reversal of impairment loss. You are required to show how these transactions will be treated in the financial statements. (10+10) Keeping in view the IAS-36, calculate the recoverable amount and impairment loss in each case: Items Carrying Value Fair Value Value in Use Selling Cost A 100,000 110,000 120,000 5,000 B 150,000 125,000 130,000 2,000 C 120,000 100,000 90,000 3,000 D 150,000 130,000 120,000 4,000

Answer rating: 100% (QA)

Lets calculate the recoverable amount and impairment loss for each case Case A Carrying Value Rs 100... View the full answer