at the end of its 2024 fiscal year, a triggering event caused a company to perform an impairment test for one of its manufacturing facilities. the following information is available: book value $ 65 million estimated undiscounted future cash flows 60 million fair value 50 million the manufacturing facility is: A. Impaired because its book value exceeds undiscounted future cash flows. B. Not impaired because its book value exceeds undiscounted future cash flows, C. Not impaired because it continues to produce revenue. D. Impaired because its book value exceeds fair value.

According to the International Accounting Standard (IAS) 36, an impairment test should be performed when the carrying value of an asset exceeds its recoverable amount, which is the higher of its fair value fewer costs to sell, and its value in use.

In this case, the book value of the manufacturing facility is $65 million, while its estimated undiscounted future cash flows are $60 million and its fair value is $50 million. Since the book value exceeds the fair value, the facility is impaired because its carrying value is greater than its fair value. Therefore, the company should recognize an impairment loss equal to the difference between the carrying value and the fair value.

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