91Ó°ÊÓ

The term "impairment" refers to a reduction of the market value of fixed or intangible assets, indicative of a reduction in the quantity, quality, or market value of an asset. The idea is that an asset should never be reported in a business's financial statements above the maximum amount that could be recouped through its sale.

Working notes:

Calculating carrying value

$$\begin{gathered} \text{°ä²¹°ù°ù²â¾±²Ô²µâ€‰v²¹±ô³Ü±ð}=\text{·¡±ç³Ü¾±±è³¾±ð²Ô³Ù c´Ç²õ³Ù}−\left(\frac{\text{·¡±ç³Ü¾±±è³¾±ð²Ô³Ù c´Ç²õ³Ù}}{\text{±«²õ±ð´Ú³Ü±ô l¾±´Ú±ð}}\right)×2 \\ =\mathrm{\$}10,000,000−\left(\frac{\mathrm{\$}10,000,000}{8}×2\right) \\ =\mathrm{\$}10,000,000−\mathrm{\$}2,500,000 \\ =\mathrm{\$}7,500,000 \end{gathered}$$

Note: Future cash flow ($6,300,000) < Carrying value ($7,500,000)

Calculating Accumulated depreciation

$$\begin{gathered} \text{´¡³¦³¦³Ü³¾³Ü±ô²¹³Ù±ð»å d±ð±è°ù±ð³¦¾±²¹³Ù¾±´Ç²Ô}=\text{°ä²¹°ù°ù²â¾±²Ô²µâ€‰v²¹±ô³Ü±ð}−\text{¹ó²¹¾±°ù v²¹±ô³Ü±ð o´Ú e±ç³Ü¾±±è³¾±ð²Ô³Ù} \\ =\mathrm{\$}7,500,000−\mathrm{\$}5,600,000 \\ =\mathrm{\$}1,900,000 \end{gathered}$$

Working notes:

$$\begin{gathered} \text{´¡³¦³¦³Ü³¾³Ü±ô²¹³Ù±ð»å d±ð±è°ù±ð³¦¾±²¹³Ù¾±´Ç²Ô}=\frac{\text{¹ó²¹¾±°ù v²¹±ô³Ü±ð o´Ú e³Ü¾±±è³¾±ð²Ô³Ù}}{\text{¸é±ð³¾²¹¾±²Ô¾±²Ô²µâ€‰u²õ±ð´Ú³Ü±ô l¾±´Ú±ð}} \\ =\frac{\mathrm{\$}5,600,000}{4} \\ =\mathrm{\$}1,400,000 \end{gathered}$$

No depreciation is recorded on impaired assets to be disposed of. Recovery of impairment losses is recorded.