Riley had a Cashgenerating unit which comprises the following assets:
Building $
Plant and equipment $
Goodwill $
Current Assets $
Total$
One of the machines, carried at $ is damaged and will have to be scrapped. The
recoverable amount of cashgenerating unit is estimated at $ What will be carrying
amount of the building after the impairment loss has been recognized? Also give interpretation of
your answer.
Riley acquired a non current asset on October Xat a cost of $ which had a useful life
of ten years and a nil residual value. The asset had been correctly depreciated upto Sep Y
At that date the asset was damaged and an impairment review was performed. On Sep Y
the fair value of the assets less costs to sell was $ and the expected future cash flows were
$ per annum for the next years. The current cost of capital is and a five year annuity
of $ per annum at would have a present value of $ What amount will be charged to
profit or loss for the impairment of this asset for the year ended Sep Y
