PPE-Impairment

Question 1

What’s the accounting for Impairments on PPE Held for Use?

Answer 1

-Step 1: Is CV > Recoverable Cost (Nominal Future Net CF’s)
Step 2: Loss = CV - FV
Depreciate new basis
No reversal of loss

Question 2

What’s the accounting for Impairments on PPE Held for Sale?

Answer 2

-Step 1: Is CV > FV less cost to sell
Step 2: Loss = CV - FV less cost to sell
No depreciation
Reversal up to previous losses allowed

Question 3

When are assets evaluated for impairment?

Answer 3

-When indications are present rather than on a regular basis