Question
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a useful life of five years and was depreciated on
ABC Ltd acquired a machine for $750 000 on 1 July 2018. The machine had a useful life of five years and was depreciated on a straight-line basis with no disposal value. ABC Ltd adopts the cost model for accounting for assets in this class. ABC Ltd makes the following estimates of the value of the machine:
| Date | Net selling price | Value in use | Fair Value |
| 30 June 2019 | $550 000 | 520 000 | 590 000 |
| 30 June 2020 | $460 000 | 420 000 | 490 000 |
Indicators of impairment were identified on 30 June 2019, while indicators of a reversal of impairment were found on 30 June 2020.
REQUIRED: Prepare journal entries relating to this asset from 30 June 2019 to 30 June 2020. Show the steps of impairment (or reversal of impairment) tests. Show all working (step by step).
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OECD Public Governance Reviews Brazils Supreme Audit Institution The Audit Of The Consolidated Year End Government Report
Authors: Oecd
1st Edition
9264188088, 978-9264188082
