Question

Vaughn Manufacturing has equipment with a carrying amount of $2490000. The expected future net cash flows from the equipment are $2530000, and its fair value is $2040000. The equipment is expected to be used in operations in the future. What amount (if any) should Vaughn report as an impairment to its equipment?

Answer 1

No impairment should be recorded

Step-by-step explanation:

$2,530,000>$2,490,000 No impairment because the expected future net cash flows from the equipment is greater than the carrying amount.

Therefore Vaughn will record or report no impairment