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?

Question

Business

Savanah Farmer

4 May, 03:34

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?

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Eddie Mays · Answer 1

No impairment should be recorded

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