Impairment of intangible Asset

Page no : 2

Shubham (student) (73 Points)
Replied 28 September 2020

Actually 5 years have already passed
So remaining life is only 5 years
at the end of a fifth year carrying value was 76500 and it was impaired by 14986 taking it to 62370 now the remaining life is 5 years so carrying value after amortisation at the end of 6th year is 62370 - 62370/5 that is 49896 and fair value is 48600 again it is impaired by 1296

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 28 September 2020

Ok, this page two impaired my view of real purchase amount- 153000/10=15,300 per annum.

six years accumulated amortisation = that * 6.

Because amortisation starts from year 1 (acquired year)

Shubham (student) (73 Points)
Replied 28 September 2020

Its *5 coz at the end of fifth year it was amortized
so for 6th year it could not be same .
what i did, is it wrong?
If yes can u please share ur mail id so that i can directly share you the question pic ?

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 28 September 2020

Amortisation Accumulated amortisation

Year 1 15300. 0

year 2 15300 15300*2

year 3 15300 15390*3

year 4 15300 15300*4

year 5 15300 15300*5

year 6 15300 15300*6

year 7 15300 “

year 8 15300 “

year 9 15300 “

year 10 15300. “

If you add all five years or multiply 15300*5 , you get the same result. You have to subtract that amount annually. For example NBV at year 5= 1530000-76500 (15300*5)= 76500. Or you can subtract for each year. Impairment happened in year five= 76500- impairment amount= carry forward NBV. In other words it’s a short cut to subtract accumulated depreciation