Tanner Company purchased a building during 2010 for $600,000. From 2010 to 2012, $240,000 of depreciation was recorded. The current fair value is $350,000 and the sum of future cash flows from the building is $370,000. The amount of impairment that should be recognized is

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Quizplus · Accepted Answer

The carrying amount of the building is $600,000 - $240,000 = $360,000. The fair value is $350,000, which is less than the carrying amount. Therefore, an impairment loss of $360,000 - $350,000 = $10,000 should be recognized.

Tanner Company Purchased a Building During 2010 for $600,000