Question 1

Section B - Case 2: TidalWave Energy

By 31 December 20X6, TidalWave Energy's tidal lagoon had a carrying amount of $11,900,000. Due to a structural fault discovered in the lagoon wall, an impairment review was conducted. The fair value less costs of disposal is estimated at $9,500,000. The value in use is estimated at $10,200,000.

What is the impairment loss to be recognized for the year ended 31 December 20X6?

Accepted Answer

Determine the recoverable amount (higher of FVLCD and VIU). Subtract the recoverable amount from the carrying amount.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using the lower of the two values as the recoverable amount.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 6

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