Question

Lebanon Corporation owns equipment with a cost of $320,000 and accumulated depreciation at December 31, 2017 of $120,000. It is estimated that the machinery will generate future cash flows of $175,000. The machinery has a fair value of $155,000. If Lebanon uses IFRS, the company should recognize a loss on impairment of...(a)$0.(b)$25,000.(c)$35,000.(d)$45,000.

Answer 1

D. USD 45,000/-

Step-by-step explanation:

By deriving the following equation:

= Equipment Cost - Accumulated Depreciation

= 320000-120000

= 200000

Now subtracting Fair value;

= 200000-155000

= USD 45,000/-