An entity purchases a haulage company for $50,000 on 1 January 20X0. The operation consists of...

An entity purchases a haulage company for $50,000 on 1 January 20X0. The operation consists of an operating licence with a fair value of $10,000 and 5 wagons each with a fair value of $6000.

On 5 January 20X0, one of the wagons crashed and the insurance company refused to settle any liability due to the non-disclosure of certain material facts. The wagon was a write-off.

The adverse publicity and operating capacity reduction, reduced the recoverable amount of the business to $25,000. This amount includes the operating license which had a fair value less costs to sell of $9,500.

What is the carrying amount of the assets after accounting for the impairment losses under IAS 36 Impairment of Assets?
Goodwill = NIL, Licence = NIL & Wagons = $25,000
Goodwill=NIL, Licence = $9,500 & Wagons = $15,500
Goodwill=$10,000, Licence = $9,500 & Wagons = $5,500
Goodwill=$5,000, Licence = $5,000 & Wagons = $15,000

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ekkarill92 answered 1 year ago

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