The company controller, Barry Melrose, has asked for your help in interpreting the authoritative accounting literature that addresses the recognition and measurement of impairment losses for property, plant, and equipment andintangible assets. “We have a significant amount of goodwill on our books from last year’s acquisition of Churchill Corporation. Also, I think we may have a problem with the assets of some of our factories out West. And oneof our divisions is currently considering disposing of a large group of depreciable assets.”Your task as assistant controller is to research the issue.Required:1. Obtain the relevant authoritative literature on accounting for the impairment of property, plant, and equipment and intangible assets using the FASB Accounting Standards Codification. You might gain access at theFASB website (www.fasb.org). Cite the reference locations regarding impairment of property, plant, andequipment and intangible assets.2. When should property, plant, and equipment and finite-life intangible assets be tested for impairment?3. Explain the process for measuring an impairment loss for property, plant, and equipment and finite-life intangible assets to be held and used.4. What are the specific criteria that must be met for an asset or asset group to be classified as held-for-sale?What is the specific citation reference from the FASB Accounting Standards Codification that contains thesecriteria?5. Explain the process for measuring an impairment loss for property, plant, and equipment and finite-life intangible assets classified as held-for-sale.
The company controller, Barry Melrose, has asked for your help in interpreting the authoritative accounting literature that addresses the recognition and measurement of impairment losses for property, plant, and equipment and
intangible assets. “We have a significant amount of
of our divisions is currently considering disposing of a large group of
Your task as assistant controller is to research the issue.
Required:
1. Obtain the relevant authoritative literature on accounting for the impairment of property, plant, and equipment and intangible assets using the FASB Accounting Standards Codification. You might gain access at the
FASB website (www.fasb.org). Cite the reference locations regarding impairment of property, plant, and
equipment and intangible assets.
2. When should property, plant, and equipment and finite-life intangible assets be tested for impairment?
3. Explain the process for measuring an impairment loss for property, plant, and equipment and finite-life intangible assets to be held and used.
4. What are the specific criteria that must be met for an asset or asset group to be classified as held-for-sale?
What is the specific citation reference from the FASB Accounting Standards Codification that contains these
criteria?
5. Explain the process for measuring an impairment loss for property, plant, and equipment and finite-life intangible assets classified as held-for-sale.
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