The following information was taken from the fixed asset records of Bosco Ltd. as of December 31, 2010:$\begin{array}{llr}
\text { Carrying value } & € 100,000 \
\text { Selling price } & € 85,000 \
\text { Costs of disposal } & € 3,000 \
\text { Expected future cash flows } & € 75,000 \
\text { Present value of expected future cash flows } & € 63,000
\end{array}$
-Using IAS 36, what is the recoverable amount?
A)€85,000
B)€82,000
C)€63,000
D)€75,000

Question

The following information was taken from the fixed asset records of Bosco Ltd. as of December 31, 2010:$\begin{array}{llr}
\text { Carrying value } & € 100,000 \
\text { Selling price } & €  85,000 \
\text { Costs of disposal } & €  3,000 \
\text { Expected future cash flows } & € 75,000 \
\text { Present value of expected future cash flows } & € 63,000
\end{array}$
-Using IAS 36, what is the recoverable amount?
A)€85,000
B)€82,000
C)€63,000
D)€75,000

Quizplus · Accepted Answer

The recoverable amount is the higher of fair value less costs of disposal (€85,000 - €3,000 = €82,000) and the present value of expected future cash flows (€63,000). Therefore, the recoverable amount is €82,000.

The Following Information Was Taken from the Fixed Asset Records