Answer
A cash schedule depicting dates (in column one), amounts of contractual cash flow (column two), and amounts of expected cash flows (column three) are computed. Column four (loss from cash flow) is prepared by deducting the expected cash flow from the contractual cash flow for each of the years. Eventually, the sum totals for the contractual and expected cash flows are computed. Moreover, the total cumulative losses for the years are also computed. The final step entails discounting the expected cash flows to arrive at their present values and the exact amount that goes to impairment.
Work Step by Step
A cash schedule depicting dates (in column one), amounts of contractual cash flow (column two), and amounts of expected cash flows (column three) are computed. Column four (loss from cash flow) is prepared by deducting the expected cash flow from the contractual cash flow for each of the years. Eventually, the sum totals for the contractual and expected cash flows are computed. Moreover, the total cumulative losses for the years are also computed. The final step entails discounting the expected cash flows to arrive at their present values and the exact amount that goes to impairment.
