Question
At the end of 2020, Concord Corporation owns a licence with a remaining life of 10 years and a carrying amount of $512,000. Concord expects
At the end of 2020, Concord Corporation owns a licence with a remaining life of 10 years and a carrying amount of $512,000. Concord expects undiscounted future cash flows from this licence to total $517,400. The licence's fair value is $407,600 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $457,400. Concord prepares financial statements in accordance with IFRS.
Determine if the licence is impaired at the end of 2020.
Prepare related entry that is necessary.(Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Assume the recoverable amount is calculated to be $429,500 at the end of 2021. Determine if the licence is impaired at the end of 2021.
Prepare related entry that is necessary.(Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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