1 At year end, the company presented the foloowing:

Equipment 9,000,000
A/D 3,000,000

Due to obsolescnece, the equipment is found to be impaired. The entity

determined the following:

FV less cost of disposal 4,500,000

Value in use 4,000,000
Undiscounted net cash inflows 5,500,000

Impairment loss?

2 Luzon Company purchased 4 convenience store buildings on Jan. 15, 2015 for
a total of P25,000,000. The building have been depreciated using SL method
for 20 years and 10% residual value

On Jan. 1, 2021, the buidlings were converted into a hotel nad restaurant. The
entity estiamted that the buildings have remaining useful life of 10 years and
residual values is zero. That undiscounted net cash inflows from the building willl be
1,500,000 per year and fair value of th four buildings is P10,000,000

Appropriate rate is 12%. 5.6502 8,475,300.00

5.65022303
REQUIRED:
Determine impairment to be recognized for 2021?

2021 deprecciation

3 On Jan. 1, 2019, Blue Compnay purchased machine for P8,000,000 and established
depreciation charge of 1,000,000 over 8 EUL

In 2022, aftrer 2021 AFS issuancem the entity concluded that the machine suffered
impairment nad P2,000,000 is a reasonable estimate of the amount expected to be
recovered through the use of the machine for the period Jan. 1, 2022 to Dec. 31, 2026
5 years Remaining life
REQUIRED:
Dec. 31, 2021 impairment loss?
 Carrying amount on Dec. 31, 2022?

CGU

1 Boy Co. has two CGUs. At year-end, the carrying amounts of the assets of one CGU
are:

Inventory 200,000
Accounts receivable 300,000
Plant and equipment 6,000,000
Accum. Depn 2,600,000
Patent 850,000
Goodwill 100,000

The receivable is regarded as collectible. The FV less cost of disposal of inventory

is equal to carrying amount. The patent has a fair value of P750,000. At year-end,
the entity undertook impairment testing of the cash generating unit and determined
the value in use of the unit at P4,050,000

REQUIRED:
A. Impairment loss allocated to plant and equipment
b. Impairment loss allocated to patent?

2 On Dec. 31, 2020, Moks Company acquired the following three intangible assets
a. Trademark for P3,000,000 with 4 yrs EUL. It is anticipated that the trademark
will be renewed in the future indefinitely
b. Goodwill for P5,000,000
c. Customer list for P2,100,000. By contract, the entity has exclusive use of the list
for 5 years. However, economic life is 3 years.

Dec. 31, 2021, before any adjsuting entries for the year, the following were obtained:
a. Because of decline in economy, trademark now expected to generate cash flows
of only 200,000 per year
b. Cash flow expected to be generated from the CGU to which the goodwill is related
is P2,000,000 per year for the next 10 years. The carrying amount of the assets of
the CGU are
Identifiable assets 15,000,000
Goodwill 5,000,000
c. Cash flow expected from the customer lsit are P800,000 in 2022 and P500,000 in 2023
d. Discount rate is 8%
PV of 1 one period 0.93 0.925926
 two periods 0.86 0.857339
PV of ordinary annuity of 1 for 10 periods 6.71 6.710081
1- (1 + I )^n
REQUIRED:
I. Impairment loss to be recognized on trademark
ii. Impairment loss to be recognized on goodwill
iii. Impairment loss to be recognized on customer list

3 On Jan. 1, 2021, Mali Co purchased a building for P20,000,000. It had 20 years EUL and no residual
value. On Dec. 31, 2025, the entity tested the asset for impairment. The FV on such date is P12M

On Dec. 31, 2027, Mali Co. decided to use the revaluation model. The fair value on such date is P18M

REQURIEDl
A. Impairment loss for 2025?
b. Carrying amount on Dec. 31, 2027?
c Gain on reversal of impairment on Dec. 31, 2027
d Revaluation surplus in 2027?
RE-ALLOCATION ADJUSTED ALLOCATION

40,000.00 600,000.00
(40,000.00) 100,000.00
700,000.00