Case 10-2 Eagle Impairment Loss Eagle Company (Eagle) is a manufacturing company with operations in Italy and Serbia. Eagle in Italy: In addition to other assets, Eagle owns and operates a commercial building in Italy that is carried at its cost less any accumulated depreciation and any accumulated impairment losses. The building represents a cash-generating unit (CGU) for which the following information is available as of December 31, 2010: Building 12/31/10 in thousands  Carrying amount
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Eagle Impairment Loss Eagle Company (Eagle) is a manufacturing company with operations in Italy and Serbia. Eagle in Italy: In addition to other assets, Eagle owns and operates a commercial building in Italy that is carried at its cost less any accumulated depreciation and any accumulated impairment losses. The building represents a cash-generating unit (CGU) for which the following information is available as of December 31, 2010: Building | 12/31/10 inthousands | Carrying amount | $1
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Eagle Impairment Case The following report outlines an analysis of Eagle Company’s assets in Serbia and Italy. With the information provided, we have created a detailed report to assess which assets should be impaired along with its impairment value under the IFRS and US GAAP standards. Eagle in Italy Under IFRS: Eagle owns a commercial building in Italy. The carrying amount is $1,100 with $900 being the value in use. According to IAS 36 P18, “An asset is impaired when its carrying amount
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with describing Eagle impairment, which is a manufacturing company, which has operations in Italy and Serbia. In Italy Eagle owns and operates a commercial building that is carried at its cost less depreciation. The case then gives us a chart which shows us Cash generating unit that includes: carrying amount $1,100, value in use 900, fair market value less costs to sell 800, fair market value 850, and undiscounted future cash flows 1,150 all in thousands. Eagle’s manufacturing company in Serbia attained
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To: Eagle Company (Eagle) From: Subject: Eagle in Italy and Eagle in Serbia Impairments Date: May 7th 2014 1. For Eagle in Italy, is the building impaired under IFRS as of Dec. 31, 2013, and if so what is the amount of the impairment? After reviewing the given facts provided by Eagle in Italy, we have determined that there is an impairment on their building under IFRS for the amount of $200,000. We have determined this through the use of IAS-36 as well as the calculations given below:
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Case #2 (Eagle Impairment Loss) Question 1: The Impairment Loss of Eagle in Italy under IFRS Recoverability test: Asset’s carrying amount exceeds the recoverable amount which is the higher of the asset’s value-in-use (discounted present value of the asset’s expected future cash flows) and fair market value less costs to sell. (IAS36-15) According to IAS36-6, “an impairment loss is the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount.
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Case 10-2 Eagle Impairment Case Question #1 Under IFRS’ International Account Standard No.36^15 an asset must be assessed for indicators of impairment at the end of each reporting period. The information provided for the commercial building in Italy does not say whether there are is an event or change in circumstances that indicate that book value of the asset may not be recoverable. Since there is no indicator mentioned, one possibility would be that no investigation of impairment take place and
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Introduction A report for the Eagles Ltd board of directors has been prepared by external consultant. In this report ratio analyses have been used to comment on the performance of the business over two year period (2008 and 2009). Profitability, Liquidity, Efficiency and Gearing ratios have been calculated (See Appendix) and used to reveal and explain the situation in the company. Firstly the importance of each kind of financial ratios is explained. Then each ratio is analysed according to provided
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| | |12/31/10 | | | |Ajax Company stock |6/20/10 |$40,000 |$36,000 |2/10/11 |$34,000 | |Bril Corporation stock |5/1/10 | 20,000 |N/A |11/15/10 | 23,000 | |Coy Company stock |8/2/10 | 16,000 | 19,500 |1/17/11 | 21,000
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content that generate substantial income and cash flow Our overriding focus is on the substantial growth opportunity in North America We believe there is substantial opportunity for international growth and expect it to be accretive to the total company operating margin We are targeting 10% annual operating income $ growth (or better) and an operating income rate in the high-teens We continue to emphasize maintaining a strong cash and liquidity position while optimizing our cost of capital We will
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