RiskyBusiness Inc., recently stumbled across some hard times due to the recession and on January 1, 2023, decided to approach OldMoney Bank to see what could be done. OldMoney Bank was not willing to extend the loan or reduce the interest rate. However, the bank did agree to accept one of the company's properties (building and land) as collateral in return for the retirement of the debt valued at 2 million dollars. The building's fair value is $1.2 million and the land's fair value is $600,000. At the time of purchase of the building and land by RiskyBusiness on January 1, 2020, the cost of the building was $ 1 million and land $500,000. Annual depreciation amounted to $100,000 (straight-line basis) for the building. Assume OldMoney Inc., has not set up an allowance for doubtful accounts for the impairment of loans. Both parties prepare their statements in accordance with IFRS.

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Accounting Treatment for RiskyBusiness Inc and OldMoney Bank IFRS RiskyBusiness Inc Asset Impairment ... View the full answer