Question - Sandman Oil Company, a successful efforts company, has three fields, A, B, and C. Costs and cash flows for the three fields are as follows:
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Field A
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Field B
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Field C
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|
Net capitalized costs
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4,000,000
|
5,000,000
|
6,000,000
|
|
Expected undiscounted future cash flows
|
4,500,000
|
4,000,000
|
5,000,000
|
|
Expected discounted future cash flows
|
3,850,000
|
3,900,000
|
3,700,000
|
Determine the impairment charge for each lease for the year.