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April 9, 2018 at 10:32 am
In question 2 can you tell the total amount of impairment loss and how to calculate it?
January 21, 2018 at 4:52 pm
Can you explain the carrying amounts you’ve taken for question 2 and also the workings?
January 21, 2018 at 8:28 pm
Reduce damaged engine to 10, reduce the brand to 65, reduce goodwill to zero and we still need to impair by a further 25
So allocate that 25 on a pro rata basis against engine 2 and tracks 10:15
February 25, 2018 at 4:53 am
Hi Mike, why is net current assets not impaired for the further 25?
February 25, 2018 at 7:38 am
Because net current assets are always shown at the lower of cost and net realisable value and, for impairments, we mustn’t reduce the carrying value of assets to an amount that is lower than their net realisable value
April 9, 2018 at 11:05 am
Carrying value of the assets is 510 and the recoverable amount of the entire subsidiary has been estimated at 350
So impairment is 160
November 24, 2017 at 4:45 pm
i cant understand how the nsp was calculated hence (92450-4750) how was the 92450 calculated?
November 24, 2017 at 6:43 pm
My mistake … it should be $93,450 – $4,750 = $88,700
July 16, 2017 at 7:47 am
Mike, could you please explain Q3 every detail?
you omit several steps, so I can’t understand the working fully.
moreover, the recoverable amount should be $88,300?
how to figure out the discounted figure “77,312”?
I know the greater one is $88,300, but suddenly impairment loss is Nill?
what is the cv?
July 16, 2017 at 8:41 am
“how to figure out the discounted figure “77,312”?” = $30,000 for each of 3 years discounted at 8% cost of capital
After 1 year that $30,000 is worth $30,000 x 1/1.08 = $27,777
After 2 years that $30,000 is worth $30,000 x 1/1.08 x 1/1.08 = $25,720
After 3 years that $30,000 is worth $30,000 x 1/1.08 x 1/1.08 x 1/1.08 = $23,815
So the $30,000 for 3 years has a cumulative value of $77,312 value in use
“moreover, the recoverable amount should be $88,300?” – the recoverable amount is the higher of value in use and net selling price
Net selling price is $88,700 (having deducted the costs of dismantling and delivery) so recoverable amount is $88,700
This is compared with the carrying value (calculated as $88,300 and that figure itself is calculated as ($97,000 – $10,000 scrap value) less depreciation of 4 months out of remaining estimated useful life of 40 months
So $87,000 x 4/40 = $8,700 depreciation and thus the carrying value as at 30 June must be $97,000 – $8,700 = $88,300
And this figure of $88,300 is lower than the recoverable amount so no impairment is necessary
Mohammed Saiful Islam says
December 4, 2017 at 1:09 pm
May 22, 2017 at 8:33 am
How to calculate the 4 months of depreciation to answer the answer of 88300 in question 3??
carrying amount= 97000- 4 months of depreciation= 88300
May 22, 2017 at 8:52 am
Have you overlooked the estimated scrap value of $10,000?
($97,000 – $10,000) x 4 / 40 = $8,700
$97,000 – $8,700 = $88,300
May 1, 2017 at 11:56 am
Hi Of all the questions in these chapters how close are they to actual exam questions
May 1, 2017 at 12:46 pm
Richard, check out the specimen exams and, so far as they are available, the past exams where mcqs are shown
NB, even if they may not be similar to past exam questions, the principles are important so you can apply those principles to exam question scenaria
January 9, 2017 at 10:44 pm
Question 4… Why when market interest rates fall, value in use of an asset increases? Would you be able to explain that in a different way?
After thinking for a while, I cannot see that unfortunately…
January 10, 2017 at 11:23 am
When interest rates fall, the value in use calculation falls because it’s calculated as the PRESENT value of future flows
Say you have a future flow in one year’s time of $1,000 and a cost of capital of 10%
The present value of that flow is $909,09
If the cost of capital falls to, say, 8%, the present value of that same $1,000 would be $925.93
Hint – in situations like this it often helps to put made-up figures into a calculator and see the results after “What happens if …”
January 10, 2017 at 11:00 pm
Thank you for your quick reply. With your example I understand the concept now. Thanks.
October 25, 2016 at 12:26 pm
question 3 is confusing need help
August 25, 2016 at 10:11 am
How did we apportion 25 000 between engine 2 and traks in Q2????
August 25, 2016 at 12:14 pm
60 : 90
120,000 is the carrying value of 2 engines so 60,000 is the carrying value of number 2 engine
Tracks and stations had a carrying value of 90,000
Engine number 1 is written down to 10,000, the brand is impaired down to 65,000, goodwill is written off and there’s no change to the net current assets
So the 2 categories that will share the remaining 25,000 impairment are the remaining engine of 60,000 and the tracks and stations of 90,000
60,000/150,000 x 25,000 = $10,000 impairment for engine number 1 and
90,000/150,000 x 90,000 = $15,000 impairment for the tracks and stations
August 30, 2017 at 8:03 am
How this ratio came 60:90
August 30, 2017 at 11:17 am
That’s explained immediately before your post!
August 24, 2016 at 5:19 pm
In question 2. Why the goodwill is fully imapaired?
August 25, 2016 at 7:25 am
Because that’s what we do when considering impairments!
1) any individual asset
3) pro-rata amongst the rest
March 27, 2017 at 8:29 pm
please elaborate on what an individual asset means because I thought an engine counts as an individual asset
August 24, 2016 at 5:06 pm
I don’t understand why there is no impairment in question 3.
If carrying amount > recoverable amount then there should be impairment and this is the case: 88.300 > 87.700.
Is the value in use really only 77.312? What about scrapping? Shouldn’t it count as net cash flow paid for the disposal of the asset? Should disposal paid also be discounted?
August 25, 2016 at 7:30 am
I think recoverable amount is $88,700 and not $87,700
March 5, 2018 at 5:52 pm
Check your answer again its says 87700 on solution! OK?
March 5, 2018 at 7:44 pm
This is an error that is, at this moment, being corrected
My original calculation resulted in a recoverable amount of $88,700 (calculation error!) so $Nil would have been the correct choice
But there aren’t many students doing these exercises if you’re the first to raise this point since August 2016!
March 6, 2018 at 11:47 am
It doesnt matter how many are doing them…. The answers should be correct! I along with other people have found errors please be more careful in the future. thank you
March 6, 2018 at 11:56 am
You’re welcome, and thanks for your input 🙂
August 11, 2016 at 4:35 pm
Hi, I need help with the right amount of depreciation in the answer. shouldn’t it be 97000/40×4
August 11, 2016 at 5:38 pm
July 25, 2016 at 5:12 am
Question 2 ias36? How engine 1 came?
May 29, 2016 at 8:38 pm
hi, can you please explain in Q3 how the 77312 cames up? 30.000*1/1,08 per year *3? because it costs 83.333..
May 30, 2016 at 7:35 am
30.000*1/1,08 per year *3?
What you have done is take the first year’s present value and multiplied by 3
You may as well have taken 90.000*1/1,08!
What you should have done is….
find the present value of $30,000 after 1 year
find the present value of $30,000 after 2 years
find the present value of $30,000 after 3 years
and add them together
May 22, 2016 at 9:51 am
Is the amount of 92.450 in the answer given wrongly instead of 93.450?
May 22, 2016 at 10:31 am
Yes, it’s in the process as I write of being amended
March 18, 2016 at 3:29 pm
HOW CAN I DOWNLOAD SOME OF THE QUESTIONS
March 18, 2016 at 10:52 pm
You can’t, sorry.
But you can try them as often as you want 🙂
February 12, 2016 at 10:49 am
Better if you put your question on the Ask ACCA Tutor for F7!
May 19, 2017 at 7:37 pm
Telepath Co also owns Rilda Co, a 100% subsidiary, which is treated as a cash generating unit. On 30 September 20X3, there was animpairment to Rilda’s assets of $3,500,000. The carrying amount of the assets of Rilda Co immediately before the impairment were:
$ Goodwill 2,000,000 Factory building 4,000,000 Plant 3,500,000 Receivables and cash (at recoverable amount) 2,500,000 __________ 12,000,000 __________ What is the carrying amount of Rilda Co’s plant at 30 Sept 20X3 after the impairment loss has been correctly allocated to its assets?
May 19, 2017 at 9:26 pm
$3,500 – (3,500/7,500*$1,500)
Where’s this question from – it’s not one of mine!
If not, then it should be in the Ask ACCA Tutor forum and not as a question unrelated to the chapter questions that are the basis of this thread
May 20, 2017 at 4:29 am
Thanks mike,this is in sept 2016 specimen.
Where is 7500 and 1500 come from?
May 20, 2017 at 7:13 am
Post this on the Ask ACCA Tutor forum page for F7 … it has nothing to do with the flash cards!
February 11, 2016 at 6:10 pm
can u guys plz help me i’m stuck in the ques no 3 in revision question IAS 36???
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