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3 October, 10:48

Concord Corporation owns a patent that has a carrying amount of $270,000. Concord expects future net cash flows from this patent to total $200,000. The fair value of the patent is $125,000. Prepare Concord's journal entry to record the loss on impairment

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  1. 3 October, 11:01
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    The carrying amount of $270,000 is greater than fair value $125,000.

    To measure the impairment loss, just do:

    = Carrying Value - Fair Value

    = $270,000 - $125,000

    = $145,000

    Therefore, the journal entry is as follows:

    Loss on impairment A/c Dr. $145,000

    To Patent $145,000

    (To record the loss on impairment)
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Home » Business » Concord Corporation owns a patent that has a carrying amount of $270,000. Concord expects future net cash flows from this patent to total $200,000. The fair value of the patent is $125,000.
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