Gracia Company is in the tin-mining extraction business. The cash-generating unit is the cash business as a whole, which is now considered as a "sun net" business. The assets of the cash-generating unit consist of the following: Property, P30,000,000; plant, machinery and equipment, P40,000,000 and extraction rights, P30,000,000. The value in use of the cash generating unit is estimated at P20,000,000. There is no fair value less cost to sell of the cash generating unit, except for the property which could be sold for a net cash proceeds of P30,000,000. The other assets have no resale value. The extraction rights have an unrecognized lease obligation of P10,000,000 payable to the state government and this could not be avoided. What amount of impairment loss that must be allocated to the extraction rights?

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Calculating the Impairment Loss for Extraction Rights Based on the information providedwe can calcul... View the full answer