A veterinary clinic, Vetalpe, is reviewing a scanner carried in its statement of financial position at 280,000. It has two years of use left. The finance department expects 162,000 of net operating cash at the end of the first year, then 87,480 at the end of the second, when the device would be sold to a refurbisher for an amount net of costs of disposal of 29,160. The discount rate provided is 8 %. A broker currently estimates the scanner's fair value less costs of disposal at 262,000. Determine value in use, recoverable amount and the impairment loss.
- Net operating cash, year 1
- 162,000
- Net operating cash, year 2
- 87,480
- Net disposal proceeds at the end of year 2
- 29,160
- Discount rate (given)
- 8 %
- Carrying amount of the scanner
- 280,000
- Fair value less costs of disposal (given)
- 262,000