E connec ACCOUNTING Ch. 11 Test 7 10.00 points Brief Exercise 11-15 IFRS; Impair
ID: 2598771 • Letter: E
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E connec ACCOUNTING Ch. 11 Test 7 10.00 points Brief Exercise 11-15 IFRS; Impairment: goodwill 11-10] Welttelper Inc acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for SS2 million, of which $15.4 million was allocated to goodwill. At the end of the current fiscal year, an mpairment test revealed the following SCC's fair value of $40 4 million approximates fair value less costs to sell, present value of SCC's estimated future cash flows is $41 2 million, book value of SCC's net assets including goodwill) $42 6 millon WebHelper prepares ts financial statements according to IFRS and SCC is considered a cash-generating unit What amount of impaiment loss, if any, should WebHelper recognize? (Enter your answer in millions million Brief Exeriso 11-15 IFRS impairment, goodwll(11 TOSHIBA esc 2Explanation / Answer
Fair value less cost to sell (recoverable amount) = $40.4 million
Book value/Carrying value = 42.6 million
According to IAS 36, when the carrying value of a cash generating unit is greater than its recoverable amount, impairment loss should be recognized.
Impairment loss = Carrying value - Recoverable amount = $42.6 - 40.4 = 2.2 million
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