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    Chapter 11 Activity/Assignment: Ans. 10,000 Solution

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    Randelle James Fiesta
    The document provides two examples of calculating impairment loss and reversal of impairment loss for an intangible asset. In the first example, an impairment loss of 10,000 is calculated based on the asset's carrying amount of 60,000 being lower than its recoverable amount of 50,000 at the end of year 3. In the second example, a gain on reversal of 5,714 is calculated based on the asset's recoverable amount of 45,000 now being higher than its carrying amount which would have been 40,000 without prior impairment recognition.

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    Chapter 11 Activity/Assignment: Ans. 10,000 Solution

    Uploaded by

    Randelle James Fiesta
    178 views1 page
    The document provides two examples of calculating impairment loss and reversal of impairment loss for an intangible asset. In the first example, an impairment loss of 10,000 is calculated based on the asset's carrying amount of 60,000 being lower than its recoverable amount of 50,000 at the end of year 3. In the second example, a gain on reversal of 5,714 is calculated based on the asset's recoverable amount of 45,000 now being higher than its carrying amount which would have been 40,000 without prior impairment recognition.

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    Chapter 11 Activity

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    The document provides two examples of calculating impairment loss and reversal of impairment loss for an intangible asset. In the first example, an impairment loss of 10,000 is calculated based on the asset's carrying amount of 60,000 being lower than its recoverable amount of 50,000 at the end of year 3. In the second example, a gain on reversal of 5,714 is calculated based on the asset's recoverable amount of 45,000 now being higher than its carrying amount which would have been 40,000 without prior impairment recognition.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    178 views1 page

    Chapter 11 Activity/Assignment: Ans. 10,000 Solution

    Uploaded by

    Randelle James Fiesta
    The document provides two examples of calculating impairment loss and reversal of impairment loss for an intangible asset. In the first example, an impairment loss of 10,000 is calculated based on the asset's carrying amount of 60,000 being lower than its recoverable amount of 50,000 at the end of year 3. In the second example, a gain on reversal of 5,714 is calculated based on the asset's recoverable amount of 45,000 now being higher than its carrying amount which would have been 40,000 without prior impairment recognition.

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    © All Rights Reserved
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    of 1

    CHAPTER 11 ACTIVITY/ASSIGNMENT

    1. At the beginning of Year 1, a government entity acquires an intangible asset for


    ₱100,000. The intangible asset has a useful life of 10 years. At the end of Year 3,
    the entity determines an indication of impairment and makes the following estimates:
    Fair value less costs to sell 60,000
    Value in use 50,000
    How much is the impairment loss?

    Ans. 10,000
    Solution:
    (100,000 x 7/10) – 60,000 = 10,000

    2. Use the information in #9 above. At the end of Year 6, Entity A determines an


    indication that the previous impairment may no longer exist and makes the following
    estimates:
    Fair value less costs to sell 42,000
    Value in use 45,000
    How much is the gain on the reversal impairment loss?

    Ans. 5,714
    Solution:
    Recoverable amount (VIU – higher): 45,000
    CA had no I.L. been recognized in previous period:
    (100,000 x 4/10) = 40,000
    CA after the I.L: (60,000 x 4/7) 34,286
    Gain on reversal of I.L. = (40,000 – 34,286) = 5,714

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