1.

What is the carrying amount of the equipment on December 31, 20X8 before it was classified as
held for sale?

(P5,000,000 -P1,000,000 = P4,000,000)

Equipment P5,000,000
Equipment Account
Depreciation P1,000,000
Carrying Amount P4,000,000

2. What amount should be recognized as impairment loss in 20X8?

(4,000,000 - P3,500,000 = P500,000)

The P3,500,000 is the amount obtainable from the sale of asset which is equipment.
P500,000 was the amount for the impairment loss.

3. What amount should be included in profit or loss in 20X9 as a result of the classification of the
equipment to property, plant, and equipment?

Depreciation should be included in profit or loss unless it is included in the carrying amount of another
asset. (IAS 16.48)
(P875,000 – P2,700,000 = P1,825,000)
(Depreciable amount for the year 2019 – Carrying Value = Fair value less cost of disposal)
Carrying value = P3,500,000
Depreciation amount per year = P875,000
There is 4 remaining year the depreciable amount was already deducted from the carrying value, which
is P3,500,000
Carrying value/remaining year = Depreciable amount

4. What is the adjusted carrying amount of the equipment on December 31, 2X20?

(P2,700,000 – P900,000 = P1,800,000)

(P2,700,000 (measurement of equipment) / 3 (remaining years) = 900,000)
The fair value less cost of disposal of the equipment was P1,800,000 for December 31, 2X20.