Raysion Company, a Public Corporation, Owns Equipment for Which the Following

Multiple Choice

Raysion Company, a public corporation, owns equipment for which the following year-end information is available: $$\begin{array} { | l | r | } \hline \text { Carrying amount } & \$ 59,000 \\\hline \text { Recoverable amount } & \$ 52,000 \\\hline & \\\hline\end{array}$$ Which of the following best describes the proper accounting treatment for Magenta's equipment?

A) It is impaired, a loss must be recognized, and may not be reversed in future periods.
B) It is impaired, a loss must be recognized, but may be reversed in future periods.
C) The equipment is not impaired.
D) It is not impaired and a loss should not be recognized Recoverable amount is lower than carrying amount therefore the asset must be written down, but may be reversed in the future.