Chapter 12: Long-Term Operating Assets: Departures from Historical Cost Flashcards
Impairment
Occurs when an asset’s total future cash-generating ability falls below its carrying value
Asset Grouping
is the lowest level of identifiable and independent cash flows
Impairment Indicators
indicate that an asset may be impaired
Recoverability
an asset refers to the firm’s ability to recover the asset’s carrying value based on the sum of the undiscounted cash flows from the use and disposal of the asset
Impairment Loss
when the asset’s carrying value is greater than its fair value
Reporting Unit (RU)
firms associate goodwill with the group of net assets in the ________, which is an operating segment or one level below an operating segment
Operating Segment
The codification defines an ___________ as a component of a public entity with the following three characteristics:
- it engages in business activities from which it may earn revenues and incur expenses
- The entity’s chief decision maker regularly reviews the performance of the segment
- The segment’s discrete financial information is available?
Cash-Generating Unit (CGU)
Under IFRS, the asset group is called a ________, which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets
Value In Use
the present value of the future cash flows the firm expects to derive from an asset
Revaluation
occurs when a company reports a long-term asset at its fair value, rather than its historical cost
Accumulated Depreciation Elimination Method
a company eliminates all prior accumulated depreciation and adjusts the historical cost of the asset to fair value
Revaluation Surplus
a specific account in other comprehensive income (OCI) in the statement of comprehensive income
