ACCT 434- Mod 5

Question 1

When testing for impairment under ASPE: What assets do we test? When do we test?

Answer 1

Test all assets

Test when there are indications of impairment

Question 2

When testing for impairment under IFRS: What assets do we test? When do we test?

Answer 2

Test all assets

For goodwill, test annually
All other assets, test when indications of impairment are present

Question 3

When you write down an asset due to impairment, can you write it back up again? Under IFRS and ASPE?

Answer 3

IFRS: Yes, but not goodwill
Only up to original cost
Indications of impairment are gone

ASPE: Never

Question 4

What is Value in Use?

Answer 4

The present value of future cash flows from continuing to operate the unit

Question 5

When is an asset impaired?

Answer 5

When the carrying amount is greater than the recoverable amount

Question 6

What is the difference between definite and indefinite assets when it comes to amortizaiton?

Answer 6

Definite- Amortized over the useful life

Indefinite- We don’t amortize, we test for impairment

Question 7

How long is the life of an intangible asset?

Answer 7

Indefinite

Question 8

In terms of acquisition differential amortization, what is the write off period and charge to account for: Accounts Receivable

Answer 8

Year 1

Bad Debt

Question 9

In terms of acquisition differential amortization, what is the write off period and charge to account for: Inventory

Answer 9

Year 1

Cost of sales

Question 10

In terms of acquisition differential amortization, what is the write off period and charge to account for: Assets and intangibles with finite life

Answer 10

of years of remaining useful life

Depreciation expense

Question 11

In terms of acquisition differential amortization, what is the write off period and charge to account for: Intangibles with indefinite life

Answer 11

No timeline unless impaired

Loss due to impairment

Question 12

In terms of acquisition differential amortization, what is the write off period and charge to account for: Long term debt

Answer 12

of years remaining until maturity

Interest expense

Question 13

In terms of acquisition differential amortization, what is the write off period and charge to account for: tax loss benefit

Answer 13

Write off in period

Income tax expense

Question 14

When is a bond considered to be trading at a premium?

Answer 14

When the stated rate is greater than the market rate