Accounting Standards 1-29 - Seth & Associates

Schedule 1. Calculation of the plant’s value in use at the end of 20X0 (Amount in
Rs. lakhs)
Year Future cash flows Discounted at 14%
20X1 300 263
20X2 280 215
20X3 420(1) 283
20X4 520(2) 308
20X5 350(2) 182
20X6 420(2) 191
20X7 480(2) 192
20X8 480(2) 168
20X9 460(2) 141
20X10 400(2) 108
Value in use 2,051
(1) Excludes estimated restructuring costs reflected in management budgets.
(2) Excludes estimated benefits expected from the restructuring reflected in management budgets.
A45. The plant’s recoverable amount (value in use) is less than its carrying amount.
Therefore, K recognises an impairment loss for the plant.
Schedule 2. Calculation of the impairment loss at the end of 20X0 (Amount in Rs.
lakhs)
Plant
Carrying amount before impairment loss 3,000
Recoverable amount (Schedule 1) 2,051
Impairment loss (949)
Carrying amount after impairment loss 2,051
At the End of 20X1
A46. No event occurs that requires the plant’s recoverable amount to be reestimated.
Therefore, no calculation of the recoverable amount is required to be
performed.
At the End of 20X2
A47. The enterprise is now committed to the restructuring. Therefore, in determining
the plant’s value in use, the benefits expected from the restructuring are considered