The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Can you help me solve this general accounting problem using the correct accounting process?

general accounting

Not Ai solution

Answer 2

Question

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Answer 6

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Answer 7

Chapter 12, Problem 12.1Q

To determine

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Answer 8

Expert Solution & Answer

Answer to Problem 12.1Q

Yes the impairment tests for tangible-long term operating assets operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Tangible Assets:

Tangible assets are those assets that are physically present in an organization and will generate cash flows for a number of years.

Intangible Assets:

Intangible assets are those assets that are not physically present in an organization but have economic values and are capable to generate cash flows for a number of years.

The difference in the both tests can be explained in the points below:

The impairment tests for tangible-long term operating assets and intangible assets are identical, the only difference is, that in case of intangible assets test for impairment is to be conducted even if there is absence of impairment indicators.
Impairment is calculated by measuring the asset’s recoverable value, if such value is less than its carrying amount than an impairment loss is booked.
Recoverable value is greater of (a) Fair value less cost to sell and; (b) Present value of expected cash flows expected from the asset.

Answer 12

Conclusion

Hence, the difference is that intangible assets are considered for impairment even if there is absence of impairment indicators while tangible assets are not.

Answer 13

Ch. 12 - Prob. 12.1Q Ch. 12 - Can firms group all property, plant, and equipment...Ch. 12 - Prob. 12.3Q Ch. 12 - Prob. 12.4Q Ch. 12 - Do firms follow the same steps for impairment...Ch. 12 - Prob. 12.6Q Ch. 12 - Prob. 12.7Q Ch. 12 - Prob. 12.8Q Ch. 12 - Under IFRS, if a firm recovers an impairment loss...Ch. 12 - Under IFRS, when do firms test plant assets and...

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

The difference if any in the impairment test for tangible long-term operating assets from intangible assets.

Answer to Problem 12.1Q

Explanation of Solution

Want to see more full solutions like this?

Chapter 12 Solutions