Imparment of Fix Assets

A/c entries 1025 views 2 replies

1. wht journal entry to be passed, if impairment to be done.

 

**Carrying amount in Balance Sheet - Machinery - 250000/-

**Realiasable value or fair Value  - 225000/-

2.  can we pass depreciation after impairment ?

 

Replies (2)

28.5. Recognition and Measurement of an Impairment Loss

An impairment loss = carrying amount of an asset less recoverable amount.

Ø  Impairment loss should be reduced from the carrying amount of asset.

Ø  An impairment loss should be recognised as an expense in the P&L a/c immediately.

Ø  If the asset is carried at revalued amount, impairment loss (related to revaluation) should be reduced from the revaluation reserve.

è Depreciation for the coming years on the assets are recalculated on the basis new carrying amount, residual value and remaining useful life of the asset, according to AS 6.

Impairment loss should be calculated after providing for current year's depreciation.

 

And in subsquent years, depreciation shall be provided after deducting impairment loss.


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