# Impairment of Assets Test

IMPAIRMENT OF ASSETS
The restraintthcoming knowledge relates to Q1 & Q2.

Aldo Balbo Casco
Appreciate in Conservation \$150,000 \$195,000 \$105,000
Carrying Sumity \$90,000 \$140,000 \$112,000
Net Realizable Appreciate \$115,000 \$136,000 \$85,000
Q1. What are the redeemable sumitys of each asset? (MCQ)

Aldo (\$115,000), Balbo (\$136,000), Casco (\$105,000)
Aldo (\$150,000), Balbo (\$136,000), Casco (\$105,000)
Aldo (\$150,000), Balbo (\$195,000), Casco (\$105,000)
Aldo (\$115,000), Balbo (\$195,000), Casco (\$85,000)
(2 marks)

Q2. What are the imbecility restraintfeiturees on each asset? (MCQ)

Aldo (\$0), Balbo (\$0), Casco (\$0)
Aldo (\$0), Balbo (\$55,000), Casco (\$20,000)
Aldo (\$25,000), Balbo (\$4,000), Casco (\$7,000)
Aldo (\$0), Balbo (\$0), Casco (\$7,000)
(2 marks)

Q3. A currency-generating individual has the restraintthcoming property:

Building \$600,000
Set & Implementry \$100,000
Goodconciliate \$80,000
List \$50,000
Sum \$830,000

Single of the implements appreciated at \$60,000 has been mischiefd & conciliate be scrapped. The sum redeemable sumity estimated from the currency-generating individual is \$470,000. What is the redeemable sumity of the present property behind the imbecility restraintfeiture? (MCQ)

\$21,800
\$28,000
\$33,500
\$50,000
(2 marks)

Q4. Which of the restraintthcoming unexceptionably defines the redeemable sumity of an asset? (MCQ)

Present bargain appreciate of the asset short consume of division
Better of just appreciate short consume of division & appreciate in conservation
Better of carrying sumity & just appreciate
Inferior of just appreciate short consume of division & appreciate in conservation
(2 marks)

Q5. An asset has a carrying sumity of \$55,000 at the year-object 31st March 2002. Its bargain appreciate is \$47,000 having a division consume of
\$3,500. A odd asset conciliate consume \$85,000. The union expects that the asset conciliate engender \$19,000/per annum of currency flows restraint the instant three years. The consume of chief is 8%. What is the imbecility restraintfeiture to be restraintmal restraint the year object 31st March 2002? (FIB)
3613151270000\$
(2 marks)
Q6. Which of the restraintthcoming are interior prognostics of imbecility? (MRQ)

A gravitate in the bargain appreciate of a implement ascribable to inflation
The skillful-treatment realized that an asset is incapable to profit up to its generous talents
A announce disposed by the magazine director than single of the lifter cars has crashed into a mole
The outgrowth of sketch of skillful-treatment to retail the asset during the instant 3 months
(2 marks)

Q7. Moby had purchased an asset on 1st September 2009 at a consume of \$500,000 with the available history of ten years with no currency inflow at the era of division. The asset has been depreciated until 31st October 2014.
At that limit, an garb occurred which resulted in the mischief of the asset & an imbecility experiment was charmed by Moby. On 31st October 2014, the just appreciate of the asset was \$160,000 with \$10,000 consume of division. The expected advenient currency flows were \$13,000/annum restraint the instant five years. The consume of chief is at 10% with five-year annuity element of 3.79. Calculate the imbecility on 31st October 2014? (MCQ)

\$0
\$100,000
\$150,970
\$200,730
(2 marks)

Q8. A currency-generating individual has the restraintthcoming property:

Property & Set \$400,000
Machinery \$90,000
Goodconciliate \$75,000
Net Property (realizable appreciate) \$30,000
Sum \$600,000

The union had breached a synod congress which results in its currency-generating individual appreciate to gravitate by \$200,000. What conciliate be the appreciate of Property & Set behind the imbecility? (MCQ)

\$101,010
\$126,316
\$266,667
\$298,990
(2 marks)

Q9. Which of the restraintthcoming is not attributable attributable attributable attributable attributable attributable an indicator of imbecility? (MCQ)

The NRV of list has gentle ascribable to mischiefs beside carrying sumity is stationary inferiored it’s than NRV
Technological procession has boomed in a country resulting long-standing implementry fit obsolete
Consume of chief of a union has extensiond ascribable to extension in bargain rates
The carrying sumity of an asset is better of the redeemable sumity of an asset
(2 marks)

Q10. A union purchased an asset on 1st January 2000 consumeing \$2.1 darling and its history was 10 years. On 31st December 2001, the just appreciate of the property was \$1.9 darling. On 31st December 2002, the redeemable sumity of the asset was \$0.7 darling. Calculate the imbecility restraintfeiture to be commemorative in Profit ; Restraintfeiture sumity on 31st December 2002? (FIB)

3613151270000\$
(2 marks)

Q11. A currency-generating individual has the restraintthcoming property:

Building \$409,050
Set ; Implementry \$311,000
Goodconciliate \$30,500
List \$156,000
Sum \$906,550
Single of the sets appreciated at \$91,000 was destroyed ; conciliate be scrapped. The sum redeemable sumity estimated from the currency-generating individual is \$760,050. What is the redeemable sumity of the Set ; Implementry behind the imbecility restraintfeiture? (FIB)
3613151270000\$
(2 marks)

Q12. Meagan had purchased an asset on 1st September 2015 at a consume of \$300,000 with the available history of six years with no residual appreciate. The asset has been depreciated until 31st October 2020.
At that limit, the asset was mischiefd ; an imbecility experiment was charmed by Moby. On 31st October 2020, the just appreciate of the asset was \$60,000 with a \$3,000 consume of division. The expected advenient currency flows were \$16,000/annum restraint the instant five years. The consume of chief is at 13% with five-year annuity element of 3.52. Calculate the imbecility on 31st October 2020? (MCQ)

\$0
\$680
\$6,320
\$7,000
(2 marks)

Q13. A bestowal face has a carrying sumity of \$39,000 at the year-object 31st March 2016. Its bargain appreciate is \$33,800 having a division consume of \$1,250. A odd bestowal face conciliate consume \$46,500. The union expects that the face can engender \$9,300/per year of currency flows restraint the instant four years. The consume of chief is 5%. What is the imbecility restraintfeiture to be restraintmal restraint the year object 31st March 2016? (MCQ)

\$1,250
\$5,200
\$6,022
\$6,450
(2 marks)

Q14. ZZZ Co purchased a non-present asset on 1st January 2012 consumeing \$3.75 darling and its history was eight years. On 31st December 2013, the just appreciate of the non-present asset was \$2.95 darling. On 31st December 2014, the redeemable sumity of the asset was \$1.25 darling. Calculate the imbecility restraintfeiture to be commemorative in Profit ; Restraintfeiture sumity on 31st December 2014 right to \$000? (FIB)

3613151270000\$ 000
(2 marks)

Q1. C

Redeemable sumity is the better of the Appreciate in Conservation or the Net Realizable Appreciate.

Q2. D

Imbecility restraintfeiture = Carrying sumity – Redeemable sumity = Positive (+)
Aldo = \$90,000 – \$150,000 = (-\$60,000) No Imbecility
Balbo = \$140,000 – \$195,000 = (-\$55,000) No Imbecility
Casco = \$112,000 – \$105,000 = \$7,000 Imbecility

Q3. D
Property which enjoy their acknowledge imbecility criteria do not attributable attributable attributable attributable attributable attributable gravitate inferior the occasion of IAS 32 -Imbecility of asset. List is mixed inferior IAS 2 – List where it is fitted by choosing inferior of Consume or Net Realizable Appreciate.
Q4. B
Q5. \$6,037

Appreciate in Conservation
Currency Flow Discount Element 8% Present Appreciate
19,000 0.926 \$17,594
19,000 0.857 \$16,283
19,000 0.794 \$15,086
Sum PV \$48,963
Just Appreciate short Consume to retail = \$47,000 – \$3,500 = \$43,500
Better of = \$48,963
Imbecility Restraintfeiture = \$55,000 – \$48,963 = \$6,037

Q6.

A gravitate in the bargain appreciate of a implement ascribable to inflation (External prognostic)
The skillful-treatment realized that an asset is incapable to profit up to its generous talents (Interior prognostic)
A announce disposed by the magazine director than single of the lifter cars has crashed into a mole (Interior prognostic)
The outgrowth of sketch of skillful-treatment to retail the asset during the instant 3 months (Interior prognostic)

Q7. B

Carrying Sumity = (500,000 × 5/10) = 250,000
Just appreciate short consume to retail = (160,000 – 10,000) = 150,000
Appreciate in conservation = (13,000 × 3.79) = 49,270
Redeemable sumity \$150,000, Imbecility = 250,000 – 150,000 = \$100,000

Q8. D

The sum imbecility of CGU is \$200,000
The goodconciliate is mixed by \$75,000 leaving \$125,000 of imbecility to be allocated to other property.
Sum of property to be mixed is \$495,000 (400 + 90 +5)
Imbecility = (400,000 ÷ 495,000) × 125,000 = 101,010
Just Appreciate behind imbecility = 400,000 – 101,010 = \$298,990

Q9. A
The NRV of the list is stationary greater than its carrying sumity so no imbecility has arisen
Q10. \$742,500

Calculation dsingle in \$000
Consume = 2,100
Depreciation = (2,100 × 2/10) = 420
Carrying sumity (Behind 2 years) = 2,100 – 420 = 1,680
Revaluation of asset = 1,680 1,900 = 220 in Revaluation Reserve
Odd Consume = 1,900
Depreciation = (1,900 × 1/8) = 237.5
Carrying sumity (Behind 1 year) = 1,900 – 237.5 = 1,662.5
Imbecility restraintfeiture = 1,662.5 – 700 = 962.5
Reversal of Revaluation Reserve = \$220
Excess commemorative in Profit ; Restraintfeiture sumity = 962.5 – 220 = \$742,500

Q11. \$211,257

The sum imbecility of CGU is \$146,500
The goodconciliate is mixed by \$30,500 leaving \$116,000 of imbecility to be allocated to other property. The set is mixed by \$91,000 leaving \$25,000 of imbecility
Sum of property to be mixed is \$629,050 (409,050 + 311,000 – 91,000)
Imbecility = (220,000 ÷ 629,050) × 25,000 = 8,743
Just Appreciate behind imbecility = 220,000 – 8,743 = \$211,257

Q12. A

Carrying Sumity = (300,000 × 1/6) = 50,000
Just appreciate short consume to retail = (60,000 – 3,000) = 57,000
Appreciate in conservation = (16,000 × 3.52) = 56,320
Redeemable sumity \$57,000, Imbecility = 50,000 – 57,000 = \$0

Q13. C

Appreciate in Conservation
Currency Flow Annuity Element 5% (1-4) Present Appreciate
9,300 3.546 \$32,978
Sum PV \$32,978
Just Appreciate short Consume to retail = \$33,800 – \$1,250 = \$32,550
Better of = \$32,978
Imbecility Restraintfeiture = \$39,000 – \$32,978 = \$6,022

Q14. \$1,071,000

Calculation dsingle in \$000
Consume = 3,750
Depreciation = (3,750 × 2/8) = 937.5
Carrying sumity (Behind 2 years) = 3,750 – 937.5 = 2,812.5
Revaluation of asset = 2,812.5 2,950 = 137.5 in Revaluation Reserve
Odd Consume = 2,950
Depreciation = (2,950 × 1/6) = 491.67
Carrying sumity (Behind 1 year) = 2,950 – 491.67 = 2,458.33
Imbecility restraintfeiture = 2,458.33 – 1,250 = 1,208.33
Reversal of Revaluation Reserve = \$137.5
Excess commemorative in Profit ; Restraintfeiture sumity = 1,208.33 – 137.5 = \$1,070,830
Right to \$000 = \$1,071,000

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