Question

An asset group is being evaluated for an impairment loss. The following financial information is available for the asset group: Carrying value Sum of the undiscounted cash flows Fair value $100,000,000 95,000,000 80,000,000 What amount of impairment loss, if any, should be recognized

Answer 1

The amount of impairment loss that should be recognized is $20,000,000

Step-by-step explanation:

In order to calculate the amount of impairment loss that should be recognized we would have to make the following calculation:

amount of impairment loss=Carrying value - Fair value

Carrying value=$100,000,000

Fair Value=$80,000,000

Therefore, amount of impairment loss=$100,000,000-$80,000,000

amount of impairment loss= $20,00,000

The amount of impairment loss that should be recognized is $20,000,000