A company purchased a machine for $10 million in 2008. In order to make it ready for production, an additional $500,000 was spent installing it. At the end of 2011, there was $6 million of accumulated depreciation associated with it. And at the end of 2011, it has an appraised value of $7 million dollars. If the company prepared its statements according to US GAAP, the machine’s carrying value on the 2011 balance sheet would be closest to…
A. 4 million
B. 4.5 million
C. 7 million
We know that under US GAAP, the value is 10m+0.5m-6m = 4.5m.
My Question: Under IFRS, since reversal of impairments are allowed, would carrying value be $7m under IFRS?