Question

IAS 36. Impairment of assets. We are a photo studio, and due to the increase in work and staff, we have had to acquire three new cameras and accessories. The acquisition occurred in January 2018. The prices of the cameras are as follows: - Camera 1: 1.750 euros - Camera 2: 3.500 euros - Camera 3: 1.950 euros - Accessories: 4.550 euros
Calculate:
- The impairment loss of the asset at the end of 2020, taking into account that the recoverable amount of the acquisitions is:
o Camera 1: 575 euros
o Camera 2: 1.500 euros
o Camera 3: 750 euros
o Accessories: 2.200 euros

Answer 1

The impairment loss of cameras are 1175; 2000 and 1200 euros respectively and that of accessories is 2350 euros.

What is impairment loss?

When the carrying cost of an asset is more than the recoverable cost of such assets, it is known as an impairment loss.

The calculation of impairment losses is done by using the formula,

Impairment Loss= Carrying Cost- Recoverable Cost

By using the above formula and the given values, the impairment losses of

1. Camera 1 will be 1175 euros
2. Camera 2 will be 2000 euros
3. Camera 3 will be 1200 euros
4. Accessories will be 2350 euros

Hence, the impairment loss of the given assets has been aforementioned.

Learn more about impairment loss here:

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