QUESTION 4

PART A

Expected Present
Years cashflows 7.5% discount factor Value
31-Dec-
16 2.5 0.1875 2.3125
31-Dec-
17 2.5 0.1875 2.3125
31-Dec-
18 2.5 0.1875 2.3125
31-Dec-
19 7.5 0.5625 6.9375

PART B

IFRS 9: Accounting for a contractual obligation at amortized expense assumes that the nominal amount
is paid, while the impact of the annual statement is discounted, i.e. the debt is not reassessed at the
filing period.

PART C

It will not be treated in accounts

PART D

IAS 36 Impairment of Assets aims to insure whether the properties of an individual are not transferred
further than their recoverable IASC recognizes that an undertaking should use discretion to assess if an
injury deficiency would be recognized for this purpose IAS 36 provided such provisions to reduce the
possibility that an undertaking might render an over-optimistic calculation of recoverable value. IAS 36
Requires a formal recoverable sum estimate.

1. An asset can suffer from disability

2. There may not be an impaired loss any more.