Page 11 - 10. COMPILER QB - INDAS 36

st 1,92,000 0.8417 1,61,606
31 March, 20X8
st 1,20,000 0.7722 92,664
31 March, 20X9

st 1,14,000 0.7084 80,758
31 March, 20Y0
Total (Value in Use) 5,88,230

Calculation of Recoverable amount:

Particulars Amount (Rs)
Value in use 5,88,230
Fair value less costs of disposal (6,00,000 – 96,000) 5,04,000
Recoverable amount 5,88,230
(Higher of value in use and fair value less costs of disposal)

Calculation of Impairment loss:
Particulars Amount (Rs)
Carrying amount 6,60,000
Less: Recoverable amount (5,88,230)
Impairment loss 71,770

Calculation of Revised carrying amount:
Particulars Amount (Rs)
Carrying amount 6,60,000
Less: Impairment loss (71,770)
Revised carrying amount 5,88,230
Calculation of Revised Depreciation:
Revised carrying amount – Residual value

Remaining life = (5,88,230 - 0) /4 = Rs 1,47,058 per annum
Set off of Impairment loss:
The impairment loss of Rs 71,770 must first be set off against any revaluation surplus in relation to the same
asset. Therefore, the revaluation surplus of Rs 36,000 is eliminated against impairment loss, and the remainder
of the impairment loss Rs 35,770 (Rs 71,770 – Rs 36,000) is charged to profit and loss.
Treatment of Government compensation:

Any compensation by the government would be accounted for as such when it becomes receivable. At this
time, the government has only stated that it may reimburse the company and therefore credit should not be
taken for any potential government receipt.

Q6 (Nov. 20)
The UK entity with a sterling functional currency has a property located in the US, which was acquired at a
cost of US$ 1.8 million when the exchange rate was ₤1 = US$ 1.60. The property is carried at cost. At the
balance sheet date, the recoverable amount of the property (as a result of an impairment review) amounted to

US$ 1.62 million, when the exchange rate ₤1 = US$ 1.80. Compute the amount which is to be reported in
Profit & Loss of the UK entity as a result of impairment, if any. Ignore depreciation. Also, analyse the total
impairment loss on account of change in value due to impairment component and exchange component.
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