Chapter 7_Homeworks | Tài liệu Tiếng Anh

Problem 1

On 1 June, Silver Wave Co purchased Green Waste Ltd for $5,000. Green Waste Ltd operates primarily in municipal waste collection. The company owns three waste collection vehicles and holds a city operating licence, which is essential for continuing operations.

On 1 June, the fair value of each vehicle and the licence is $900. Green Waste Ltd does not have insurance for its vehicles.

On 1 July, one vehicle was destroyed in an accident and is a total loss. Following this incident, the value in use of the business is estimated at $3,400.

Required

Allocate the impairment loss to the assets of the business.

Problem 2

On 1 March, Orion Waste Co purchased Pure Collect Ltd for $6,000. Pure Collect owns:

• three collection vehicles
• an operating licence (essential to operate)

At the acquisition date, the fair values were:

• each vehicle: $1,000
• operating licence: $1,200

On 1 April, due to loss of major contracts and reduced demand, the value in use of the business is estimated at $3,900. None of the vehicles were destroyed, and all assets are considered part of a single cash-generating unit. There are no legal or residual value constraints on any individual asset.

Required
Calculate and allocate the impairment loss across all assets of the business, in accordance with IAS 36.

Problem 3

A machine was acquired on 1 January 20X5 at a cost of $50,000 and has a useful economic life of ten years. On 31 December 20X9 an impairment review was performed.

The fair value of the machine is $26,000 and the cost of disposals are $2,000. The expected future cash flows are $5,000 per annum for the next five years. The current cost of capital is 10%. An annuity factor for this rate over this period is 3.791.

Required

Prepare extract from the financial statement for the year-ended 31 December 20X9.