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Gibbon Corp., a Canadian public corporation, owns equipment for which the following year-end information is available:
Carrying amount (book value).$59,000
Recoverable amount...52,000
Fair value less disposal costs..55,000
Which of the following best describes the proper accounting treatment for Gibbon's equipment?
| | | It is not impaired and a loss should not be recognized. |
| | | It is impaired and a loss must be recognized, with no reversal possible. |
| | | It is not impaired, but a loss must be recognized. |
| | | It is impaired and a loss must be recognized, but the loss but may be reversed in future periods. |
2 points
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