Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 12, Problem 12.7Q
To determine
To explain: Whether the impairment loss is recovered in the subsequent accounting periods.
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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.
One of the main differences between U.S. GAAP and IAS/IFRS
is the measurement of property, plant & equipment subsequent
to initial recognition. Read IAS 16 and answer the following
questions. Provide a list of the references you have used to
search this topic.
1) What are the accounting models accepted under IFRS for the
measurement of property, plant & equipment subsequent to
initial recognition?
2) How often should the company revalue its property, plant &
equipment under the revaluation model?
3) How should the revaluation gains and losses be accounted for
and reported in the financial statements?
4) How should any claim for compensation from third parties for
impairment be accounted for?
5) How should the recoverability of the carrying amount of
property, plant & equipment be accounted for?
When does a company record an asset related to a gain contingency?
a. When future events will possibly occur and the amount can be reasonably estimated.
b. When there is a remote chance that future events will occur and the amount can be reasonably estimated.
c. When future events are probable to occur and the amount can be reasonably estimated.
d. Gain contingencies are not recorded.
Chapter 12 Solutions
Intermediate Accounting
Ch. 12 - Prob. 12.1QCh. 12 - Can firms group all property, plant, and equipment...Ch. 12 - Prob. 12.3QCh. 12 - Prob. 12.4QCh. 12 - Do firms follow the same steps for impairment...Ch. 12 - Prob. 12.6QCh. 12 - Prob. 12.7QCh. 12 - Prob. 12.8QCh. 12 - Under IFRS, if a firm recovers an impairment loss...Ch. 12 - Under IFRS, when do firms test plant assets and...
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Prob. 12.1MCCh. 12 - Prob. 12.2MCCh. 12 - Prob. 12.3MCCh. 12 - Prob. 12.4MCCh. 12 - Prob. 12.5MCCh. 12 - Prob. 12.6MCCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Indefinite-Life Intangible Asset Impairment....Ch. 12 - Prob. 12.6BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.16BECh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.19BECh. 12 - Prob. 12.20BECh. 12 - Prob. 12.21BECh. 12 - Prob. 12.22BECh. 12 - Prob. 12.23BECh. 12 - Tangible Asset Impairment. Henne Optical...Ch. 12 - Tangible Asset Impairment Loss. Use the same...Ch. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Tangible Asset Impairment Loss, IFRS. Use the same...Ch. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Assets Held for Disposal. Hattie Corporation...Ch. 12 - Prob. 12.11ECh. 12 - Asset Revaluation, Downwards, IFRS. Lousa Company...Ch. 12 - Tangible Asset Impairment. Chrispian Cookies, Inc....Ch. 12 - Prob. 12.2PCh. 12 - Tangible Asset Impairment. Using the same...Ch. 12 - Prob. 12.4PCh. 12 - Goodwill Impairment, Tangible Fixed Assets, and...Ch. 12 - Tangible Asset Impairment, Potential Reversal,...Ch. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Comprehensive Asset Revaluation Problem (Initial...Ch. 12 - Prob. 12.11PCh. 12 - Judgment Case 1: Impairments of PPE under IFRS...Ch. 12 - Prob. 2JCCh. 12 - Prob. 3JCCh. 12 - Financial Statement Analysis Case 1: Long-Lived...Ch. 12 - Surfing the Standards Case 1: Impairments of PPE...Ch. 12 - Prob. 2SSCCh. 12 - Prob. 1BCCCh. 12 - Basis for Conclusions Case 2: Intangible Assets ...Ch. 12 - Basis for Conclusions Case 3: Goodwill Impairment...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its lifearrow_forwardExplain the meaning of an impairment of an asset. Provideseveral examples. What accounting event should occurwhen an asset has become substantially impaired?arrow_forwardWhich of the following most accurately reflects the concept of depreciation as used in accounting? The proccess of charging the decline in value of an economic resource to income in the period in which the benefit occured. O The proccess of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. OA method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved. O An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording fair market value of tangible assets.arrow_forward
- What answerarrow_forwardWhich of the following statements related to long-lived assets is true? Depreciation is calculated the same for financial reporting purposes and income tax purposes. If a company changes a depreciation estimate, it does not require a prior period adjustment. Depreciation is the process to value an asset at its fair market value. There is only one test to record an asset's impairment.arrow_forwardWhen a company changes the way it depreciates an asset in midstream, what change would be made to reflect?arrow_forward
- What is the meaning of the term “an impairment loss of an asset” specified in accounting and the International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS)?arrow_forwardCan the selection of a depreciation method affect a company’s asset replacement policy (i.e., the timing of its asset replacement)? If so, how?arrow_forwardExplain how asset impairment differs from depreciation, depletion, and amortization. How do companies measure impairment losses for property, plant, and equipment and intangible assets with finite useful lives?arrow_forward
- When must a company recognize an asset retirementobligation?arrow_forwardWhich of the following most accurately reflects the concept of depreciation as used in accounting? - The process of charging the decline in value of an economic resource to income in the period in which the benefit occurred. - A method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved. - The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. - An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording the fair market value of tangible assets.arrow_forwardUnder IFRS, when a company chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct? a. When an asset is revalued, the entire class of property, plant, and equipment to which the asset belongs must be revalued. b. When an asset is revalued, individual assets within a class of property, plant, and equipment to which that asset belongs can be revalued. c. Revaluations of property, plant, and equipment must be made every three years. d. An increase in an asset’s book value as a result of the first revaluation must be recognized as a component of profit and loss.arrow_forward
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