The management of Sage Hill Inc., a small private company that uses the cost recovery impairment model, was discussing whether certain equipment should be written down as a charge to current operations because of obsolescence. The assets had a cost of $930,000, and depreciation of $320,000 had been taken to December 31, 2017. On December 31, 2017, management projected the undiscounted future net cash flows from this equipment to be $340,000, and its fair value to be $230,000. The company intends to use this equipment in the future. |