All of the following statements regarding asset impairments are true EXCEPT which one?O After recording the impairment loss, the reduced carrying amount of the asset held for use becomesits new cost basisO An impaired asset held for disposal may not be written upO An impairment loss for an asset held for use may not be restored.An impaired asset held for disposal is treated like inventory, and therefore should be reported at thelower-of-cost or net-reaalizable value.

Asset impairment occurs when the carrying amount of an asset exceeds its recoverable amount. The…

Answered: All of the following statements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An impairment loss for goodwill is calculated as the difference between ________. Group of answer choices the fair value of the reporting unit (including goodwill) and the book value of the reporting unit (including goodwill) the implied fair value of goodwill and its book value the fair value of the reporting unit (including goodwill) and the fair value of its net assets (without goodwill) the book value of the reporting unit (including goodwill) and the book value of its net assets (without goodwill)
q24 Which of the following is NOT a step in impairment testing? Select one: a. Calculate the asset’s carrying amount in the books of the entity b. Sell the asset after if the fair value is greater than the recoverable amount c. Calculate the recoverable amount of the asset d. Assess whether there are circumstances that may indicate that the asset should be impaired.
Once an asset has been determined to be impaired, the amount of impairment is measured as: The asset's cost minus the fair value The asset's future cash inflows minus the book value The asset's book value minus the fair value The asset's cost minus the book value
1. Find the proper FASB ASC citation that provides guidance on the measurement of an impairment loss for a long-lived asset. (The citation must follow xxx-xx-xx-xx or xxx-xx-xx-x format)
Explain the accounting treatment in the event that an impairment review of a non-current asset which has been previously revalued with a revaluation surplus revealed that the non-current asset has suffered an impairment loss.
The main objective of IAS 36 Impairment of Assets is to prescribe the procedures that should ensure that an entity's assets are included in its statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognized. Required: Define an impairment loss explaining the relevance of fair value less costs to sell and value in use and state how frequently assets should be tested for impairment. 2. Describe the possible incators of impairment. 3. Explain how an impairment loss is accounted for after it has been calculated.

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