In 2013, Sopkiewicz International acquired production machinery at a cost of €860,000, which now has a book value of €380,000. The value in use of the machinery is €335,000 and its fair value less selling costs is €290,000. The company uses IFRS.
a. Determine if an impairment loss has occurred. Explain.
b. If an impairment loss has occurred, provide the journal entry to record the impairment loss and determine the new carrying value of the machinery.

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The Answer of In 2013, Sopkiewicz International acquired production machinery at a cost of €860,000, which now has a book value of €380,000. The value in use of the machinery is €335,000 and its fair value less selling costs is €290,000. The company uses IFRS.
a. Determine if an impairment loss has occurred. Explain.
b. If an impairment loss has occurred, provide the journal entry to record the impairment loss and determine the new carrying value of the machinery.

In 2013, Sopkiewicz International Acquired Production Machinery at a Cost