An asset is considered impaired if:O the fair market value of the asset exceeds the carrying value of the assetO the future estimated cash inflows are less than the carrying value of the assetO the future estimated cash inflows are less than the fair market value of the assetthe carrying amount of the asset exceeds the fair market value of the asset

In accounting, an asset is considered impaired when its carrying amount (book value) is greater than…

Answered: An asset is considered impaired if: O…

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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Someone who is risk neutral A. does not care about an asset's risk B. places a value on an asset equal to its expected expected value OC. is indifferent between a risk-free asset and a risky asset with the same expect value OD. all of the above OE. none of the above
Assets intended to be held and used for productive purposes may suffer from impairment in each of the following circumstances except O A change in the way the assets are used or physical change in the assets. O Asset costs incurred exceed the original amounts planned. Discounted expected future cash flows and interest charges are less than the carrying amount of the assets. O A significant adverse change in legal factors that might affect the assets' fair value.
If fair value of an impaired intangible asset recovers after an impairment has been recognized, a restoration gain may be recorded in a subsequent period. O a. True O b. False
14.The loss of available-for-sale investment credit (AFS) cannot exceed the amount by which the fair value is less than the amortized cost. Select one: True False
A loss on impairment on a limited life intangible asset is the difference between the asset’s Select one: carrying value and its undiscounted expected future net cash flows. fair value and its net realizable value. fair value and its discounted expected future net cash flows. carrying value and its fair value.
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.
Impairment of an intangible asset occurs when the book value of an asset is less than the fair value. True O False
Which of the following factors cannot be used to determine an insurer's limit of liability on property coverage? O A. Actual cash value Replacement cost Salvage value Policy limits OB. O C. D. Whiteboard
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
On the balance sheet date, the book value (or carrying value) of an asset should always equal the asset's fair value. Select one: True False
Which of the following is not a criterion that must be met for an item to be classified as a liability? A certain cash payment will occur in the future. A sacrifice will require the entity’s assets or services. There is a probable future sacrifice. There is a present obligation that results from a past transaction.
9 - When identifying undervalued and overvalued assets, which of the statements below is false? An asset is properly valued if its estimated rate of return is equal to its required rate of return. An asset is considered overvalued if its estimated rate of return is below its required rate of return. An asset is considered undervalued if its estimated rate of return is above its required rate of return. An asset is considered overvalued if its required rate of return is below its estimated rate of return. All of the above answers are false. None of the above answers is false.

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