Accounting Standards 1-29 - Seth & Associates

in forecasting cash flows. This results in an increase in the estimated future cash
flows used to determine value in use at the end of 20X0. In accordance with
paragraphs 94-95 of this Statement, the recoverable amount of the plant is redetermined
at the end of 20X2.
Schedule 3. Calculation of the plant’s value in use at the end of 20X2 (Amount in
Rs. lakhs)
Year Future cash flows Discounted at 14%
20X3 420(1) 368
20X4 570(2) 439
20X5 380(2) 256
20X6 450(2) 266
20X7 510(2) 265
20X8 510(2) 232
20X9 480(2) 192
20X10 410(2) 144
Value in use 2,162
(1) Excludes estimated restructuring costs because a liability has already been recognised.
(2) Includes estimated benefits expected from the restructuring reflected in management budgets.
A48. The plant’s recoverable amount (value in use) is higher than its carrying
amount (see Schedule 4). Therefore, K reverses the impairment loss recognised for
the plant at the end of 20X0.
Schedule 4. Calculation of the reversal of the impairment loss at the end of 20X2
(Amount in Rs. lakhs)
Plant
Carrying amount at the end of 20X0 (Schedule 2) 2,051
End of 20X2
Depreciation charge (for 20X1 and 20X2 Schedule 5) (410)
Carrying amount before reversal 1,641
Recoverable amount (Schedule 3) 2,162
Reversal of the impairment loss 521
Carrying amount after reversal 2,162
Carrying amount: depreciated historical cost (Schedule 5) 2,400(1)