F3 M8 Impairment Flashcards
Under US GAAP, subsequent reversal of intangible asset impairment losses is _____ unless the intangible asset is held for sale.
Prohibited
How does a company account for the reported goodwill in the current year?
Determine whether the fair value of the reporting unit is less than the carrying amount and report and impairment loss on goodwill in the income statement
Is goodwill amortized?
No
Recoverability test is only performed on ____ with ____.
Intangible assets with a limited life (patents)
When a permanent impairment has occurred, the book value is _____ and the accumulated depreciation is ____ for the value of the impairment. Don’t forget to calculate the new _____ expense.
Reduced
Increased
Depreciation expense
Under GAAP the first step in determining if a long-lived asset is impaired is to compare ____ with ____.
Carrying amount of the asset to the undiscounted expected future cash flows from the asset.
Under GAAP, if the undiscounted future cash flows > the carrying value of the asset, is there an impairment?
No
Under GAAP, if the undiscounted future cash flows < the carrying value of the asset, is there an impairment?
Yes
Under IFRS, impairment losses exists when the ____ value of a fixed asset exceeds the fixed asset’s _____.
Carrying value exceeds the recoverable value
The recoverable amount is the greater of the asset’s fair value less costs to the sell and the asset’s value in use (present value of future cash flows)
Under IFRS, how do you calculate the recoverable amount of a long-lived fixed asset?
The recoverable amount is the greater of the asset’s fair value less costs to the sell and the asset’s value in use (present value of future cash flows)
When should a long-lived asset be tested for recoverability?
When the events or circumstances indicate that the carrying amount may not be recoverable
Under US GAAP, long-lived assets that are impaired can only have their carrying value restored if they are ____.
Held-for-disposal
