Document ID: chunk:federal_register_of_legislation:F2023C00180:front:0:p56
Version: federal_register_of_legislation:F2023C00180
Segment Type: other
Provision Reference: 
Character Range: 160590–168015

25,325(a),(c)              13,153
20X6                                                                                                                                                   24,825(a),(c)              11,310
20X7                                                                                                                                                   24,123(a),(c)              9,640
20X8                                                                                                                                                   25,533(a),(c)              8,951
20X9                                                                                                                                                   24,234(a),(c)              7,452
20X10                                                                                                                                                  22,850(a),(c)              6,164
Value in use                                                                                                                                                                      121,128

   (a)      Includes estimated costs necessary to maintain the level of economic benefit expected to arise from the machine in its current condition.
   (b)      Excludes estimated costs to enhance the machine's performance reflected in management budgets.
   (c)      Excludes estimated benefits expected from enhancing the machine's performance reflected in management budgets.

IE58 The machine's recoverable amount (value in use) is less than its carrying amount. Therefore, F recognises an impairment loss for the machine.
Schedule 2. Calculation of the impairment loss at the end of 20X0

Machine

                                        CU

Carrying amount before impairment loss  150,000
Recoverable amount (Schedule 1)         121,128
Impairment loss                         (28,872)
Carrying amount after impairment loss   121,128

Years 20X1–20X3
IE59 No event occurs that requires the machine's recoverable amount to be re-estimated. Therefore, no calculation of recoverable amount is required to be performed.

At the end of 20X4
IE60 The costs to enhance the machine's performance are incurred. Therefore, in determining the machine's value in use, the future benefits expected from enhancing the machine's performance are considered 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. As a consequence, in accordance with paragraphs 110 and 111 of AASB 136, the recoverable amount of the machine is recalculated at the end of 20X4.
Schedule 3. Calculation of the machine's value in use at the end of 20X4

Year                                                                                                                  Future          Discounted
                                                                                                                       cash flows(a)  at 14%

                                                                                                                      CU                          CU

20X5                                                                                                                  30,321                      26,597
20X6                                                                                                                  32,750                      25,200
20X7                                                                                                                  31,721                      21,411
20X8                                                                                                                  31,950                      18,917
20X9                                                                                                                  33,100                      17,191
20X10                                                                                                                 27,999                      12,756
Value in use                                                                                                                                      122,072

  (a) Includes estimated benefits expected from enhancing the machine's performance reflected in management budgets.

IE61 The machine's recoverable amount (ie value in use) is higher than the machine's carrying amount and depreciated historical cost (see Schedule 4). Therefore, K reverses the impairment loss recognised for the machine at the end of 20X0 so that the machine is carried at depreciated historical cost.
Schedule 4. Calculation of the reversal of the impairment loss at the end of 20X4

Machine

                                                                                                                                                                                                                                                                          CU

Carrying amount at the end of 20X0 (Schedule 2)                                                                                                                                                                                                                           121,128
End of 20X4
Depreciation charge (20X1 to 20X4 – Schedule 5)                                                                                                                                                                                                                           (48,452)
Costs to enhance the asset's performance                                                                                                                                                                                                                                  25,000
Carrying amount before reversal                                                                                                                                                                                                                                           97,676
Recoverable amount (Schedule 3)                                                                                                                                                                                                                                           122,072
Reversal of the impairment loss                                                                                                                                                                                                                                           17,324
Carrying amount after reversal                                                                                                                                                                                                                                            115,000

Carrying amount: depreciated historical cost (Schedule 5)                                                                                                                                                                                                                 115,000(a)
  (a) The value in use of the machine exceeds what its carrying amount would have been at depreciated historical cost. Therefore, the reversal is limited to an amount that