Chapter 1
Recognition and Measurement
31
AP-12B (
6
)
Manitoba Telecom is a cellular carrier operating fromWinnipeg. The company has wireless
signal amplifier installations across the province and uses the revaluation model under IFRS
to account for this equipment. In fiscal 2016, it was determined that the fair value of the
amplifiers is $9 million. The actual amount currently recorded on the books is as follows.
Amplifiers
$12,000,000
Accumulated Depreciation
3,000,000
Note that $2,000,000 worth of amplifiers were damaged due to a severe storm across the
province and will need to be written off this year. The write off has not yet been recorded;
however, the impairment is already factored in the fair value of the amplifiers. Prepare a
calculation showing the amount of gain or loss to be recorded at the end of this fiscal year
under the revaluation model.
