Impairment of NCA (Ch #2)

Question 1

Entry of Impairment loss

Answer 1

Imp Loss Dr
N.C Asset Cr

Or

Imp Loss Dr
Acc Imp Cr

Question 2

planning is of normal/usual or abnormal/unusual?

planning is of business or industry?

Answer 2

Planning is always of normal/usual not unusual/abnormal

business not industry

Question 3

Items to be included in Cost to Sell?

Answer 3

1. Legal Cost
2. Stamp duty
   3 . Direct incremental cost to bring the asset in its saleable condition and location
3. Cost of removing the asset
4. If restructuring is announced then
   all committed expenses will be part
   as cost to sell

Question 4

Items not to be included in Cost to Sell?

Answer 4

1. Redundancy cost
2. Finance Cost
3. If restructuring is not yet announced then, No expense will be part of cost to sell

Question 5

can 1 department take profit from other department while supplying goods

Answer 5

no it cannot take

Question 6

REVERSAL OF IMPAIRMENT LOSS?

Answer 6

Revised Book Value:
lower of;
-Recoverable Amt
-WDV(if Imp never took place)