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Hart Corporation owns machinery with a book value of $600,000. It is estimated that the machinery will generate future cash flows of $570,000. The machinery has a fair value of $420,000. Hart should recognize
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21 votes
21 votes
Hart Corporation owns machinery with a book value of $600,000. It is estimated that the machinery will generate future cash flows of $570,000. The machinery has a fair value of $420,000. Hart should recognize a loss on impairment of

User Krinn
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1 Answer

14 votes
14 votes

Answer: $180,000

Step-by-step explanation:

An asset is said to be impaired when the future cashflows that it will bring in are less than the book value and when the fair value of the asset is also less than the book value.

Impairment loss = Book value of asset - Fair value

= 600,000 - 420,000

= $180,000

User Andy Tolbert
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