How to calculate recoverable amount and value in use

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Reference no: EM131501168

Part A -

Write 1000 word short essay about the following: How to calculate Recoverable amount, Value in use, Fair value less cost of disposal.

Part B -

"Gali Ltd has determined that its fine china division is a CGU. The carrying amounts of the assets at 30 June 2015 are as follows:"

Account

Carrying Amount

Patent

318000

Equipment

73000

Fittings

46000

Inventory

20000

Goodwill

17000

Total CA

474000

Gali Ltd calculated the value in use of the division to be: 423000

If the fair value less costs of disposal of the Patent is: 305630

Required: Prepare the journal entry(ies) for any impairment loss occurring at 30 June 2015 including supporting calculations.

This assignment has 2 parts, 1000 word theory interpretation essay and a response to a practical application of the theory.

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The paper is in relation to the steps involved in computing the impairment loss of an asset. The asset is impaired when its recoverable amount is less than its carrying amount. The recoverable amount is computed which is the greater of the fair value less cost of disposal and value in use.

Reference no: EM131501168

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inf1501168

6/15/2017 4:02:40 AM

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len1501168

5/19/2017 2:30:43 AM

This assignment has 2 parts, 1000 + 10% word theory interpretation essay and a response to a practical application of the theory. The assignment must be typed, use Arial font, 12, make sure you do proper referencing, at least use 6 references, to be submitted the soft copy in Turnitin and hard copy in lecture Week 10. Please make sure you attach a KOI assignment cover sheet, with ID numbers and signed. Late assignments will be penalised, 10% deduction per day.

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