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Class 8.2 Slides_Impairment_Student.pptx

Class 8.2 Slides_Impairment_Student.pptx - A310 CLASS 8.2...

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A310 – CLASS 8.2 Asset Impairment (Ch 11)
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IMPAIRMENT Of long-lived assets
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IMPAIRMENT According to GAAP, assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets When to Test for Impairment Tested for impairment only when events or changes in circumstances indicate that the book value of the asset may not be recoverable
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WHEN ASSETS MIGHT BE IMPAIRED Some examples of changes in circumstances indicating that an asset may be impaired: A significant decrease in market price A significant adverse change in how the asset is being used or in its physical condition A significant adverse change in legal factors or in the business climate An accumulation of costs significantly higher than the amount originally expected for the acquisition or construction of an asset A current-period loss combined with a history of losses or a projection of continuing losses associated with the asset A realization that the asset will be disposed of significantly before the end of its estimated useful life
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IMPAIRMENT LOSS
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