Fixed Asset Impairment

Question 1

The carrying amounts of fixed assets held for use and to be disposed of need to be reviewed at least _______ or whenever events or changes in circumstances indicate that the carrying amount may not be ________

Answer 1

annually; recoverable

Question 2

If the sum of _________ expected cash flows is less than the carrying amount, an _______ ____ needs to be recognized

Answer 2

undiscounted; impairment loss

Question 3

Impairment loss calculation for assets held for use

Answer 3

FV or PV future net cash flows - carrying value

Question 4

Impairment loss calculation for assets held for disposal

Answer 4

FV or PV future net cash flows - carrying value + cost of disposal

Question 5

Under GAAP, restoration/reversal of write down is not permitted for assets held for:

Answer 5

use

Question 6

Under GAAP, write the asset down and depreciate the new cost for assets held for:

Answer 6

use

Question 7

Under GAAP, restoration/reversal of write down is permitted for assets held for:

Answer 7

disposal

Question 8

Under GAAP, write the asset down and do not depreciate for assets held for:

Answer 8

disposal

Question 9

IFRS uses a ___ ____ model for the calculation of impairment loss

Answer 9

one step

Question 10

IFRS _______ the reversal of impairment losses

Answer 10

allows

Question 11

The impairment loss is reported as a component of _____ ____ ______ ______ before income taxes

Answer 11

income from continuing operations

Question 12

An impairment loss is not:

Answer 12

extraordinary

Question 13

IFRS impairment formula

Answer 13

Fixed assets recoverable amount - carrying value

Question 14

The fixed assets recoverable amount is the greater of:

Answer 14

value in use or (FV - cost to sell)