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operations
Impairment of Non-Financial
Asset
Carrying
amount
Lower
Recovera
ble
amount
Lower
Recovera
ble
amount
IGNORE
Value in use
Definition
Represents a separate major line of business or
geographical area of operations
Is a part of a single-coordinated plan to dispose of a separate major line
of business or geographical operations
Conditions to be classified as
held for sale
Available for immediate sale in its present
condition
Actions required
to complete the
plan are more
likely to happen.
Sale is
intended to
be completed
within one
year
The selling
price must be
reasonable
No accounting
Lower
problem
Lower
amount
Fair Value
Recoverable
less costs to
Amount
sell
Impairment loss xx
Asset
xx
Impairment
Lower
Loss
Subsequent Measurement
Carrying Amount
Lower
GAIN
Lower
IMPAIRMENT LOSS
Lower
amount
FV Less CTS
Asset
xx
Impairment Loss
xx
xx
Presentation
Current
Asset
No more
depreciation
No retroactive
presentation
Assets and
Liabs are
presented
separately.
Sample Problems
On October 1,2015, when the carrying amount of the net
assets of a business segment was 50M. Yomi signed a
legally binding contract to sell the business segment. The
sale is expected to be completed by March 31,2016 at a
selling price of 45M. In addition, prior to March 31,2016,
the sale contract obliges Yomi to terminate the employment
of certain employees of the business segment incurring an
expected termination costs of 3M to be paid on June 30,
2016. The segments revenues and operating expenses for
2015 respectively were 30M and 38M. Before income tax,
how much will be reported as loss from discontinued