Moffatt Ltd had an item of equipment with a carrying amount (cost less accumulated depreciation)of $400 000.The fair value less costs to sell of the equipment is estimated at $380 000,while its value in use is calculated at $388 000.The amount of the impairment loss that would need to be recorded is:

Question

Quizplus · Accepted Answer

The impairment loss is calculated as the difference between the carrying amount and the recoverable amount, which is the higher of fair value less costs to sell ($380,000) and value in use ($388,000). The recoverable amount is $388,000, so the impairment loss is $400,000 - $388,000 = $12,000.

Moffatt Ltd Had an Item of Equipment with a Carrying