Use the information for Qilin Corp. given in BEll-11. By the end of the following year, the machinery's fair value has increased to $490,000.
In exercise
Qilin Corp., a small company that follows ASPE, owns machinery that cost $900,000 and has accumulated depreciation of$360,000. The undiscounted future net cash flows from the use of the asset are expected to be $500,000. The equipment's fair value is $400,000. Using the cost recovery impairment model, prepare the journal entry, if any, to record the impairment loss.
(a) Assuming the machinery continues to be used in production, prepare the journal entry required, if any, to record the increase in its fair value.
(b) Explain any differences in your answer to part (a) If Qilin prepares financial statements in accordance with IFRS.