Case 1 - New York University Center for Law and Business...

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ACC5110 Winter 2010 FASB Codification Case #1 Fair Value Accounting and Asset Write-downs Accounting Standards* Overview: The objective of the first case using the FASB Codification is to improve understanding of fair value accounting and current accounting policies of asset write-downs (or asset impairment). Questions: 1. Using the FASB Codification, identify the most updated guidance of fair value accounting and then discuss about the fair value hierarchy and suggested valuation methods in the standards. 2. Using the FASB Codification, what accounting guidance applies to the determination of whether an asset is impaired (Hint: specify each standard for particular type of assets or liabilities and discuss indicators of impairment)? 3. On September 28, 1998, the former SEC Chairman Arthur Levitt gave a speech at the
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Unformatted text preview: New York University Center for Law and Business about top five accounting hocus-pocus items. Summarize each item. 4. What are the circumstances in which company management may be more likely to take a write-down? Should such a declaration be presumed to be a "big bath"? What differentiates the occasional write-off from a management strategy of a "big bath"? 5. What are the debates surrounding the rule of goodwill and other intangible assets with indefinite lives (SFAS No.142)? Do you believe the issuance of SFAS No.142 results in effective financial reporting? Why or why not? Explain. * This case partially based on Mastery of the Financial Accounting Research System (FARS) through Cases written by Wanda A. Wallace. +...
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