F8: Property, Plant & Equipment

Question 1

Steps of the impairment loss for held for use

Answer 1

1. Undiscounted Cash Flows < Carrying Value
2. Carrying Vale - FV
   
   • Use greater of the market or present value for FV

Question 2

Calculate gain recognized from the exchange of lacked commercial substances and boots received

Answer 2

• Compare boot received with total consideration rec’d (includes the boots)
• Boot rec’d less than 25% of total consideration:
  
  • Boots / Total consideration re’d x Gain
  • Gain = FV of old - CV of old
• Boot rec’d >= 25% of total consideration: All gain is recognized