us_10_2c_idas_impairment_case_082111

us_10_2c_idas_impairment_case_082111 - Case 10-2 Idas...

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Copyright 2009 Deloitte Development LLC All Rights Reserved. Case 10-2 Ida’s Impairment Ida Inc. (Ida) is a manufacturing company with operations in the United States and Spain. As a U.S. subsidiary of a U.K. entity, Ida prepares its financial statements in accordance with (1) U.S. GAAP for reporting to its U.S.-based lender and (2) IFRSs in reporting to its parent. U.S. Operations In addition to other assets, Ida owns and operates a commercial building in the United States that is carried at its cost less any accumulated depreciation and any accumulated impairment losses. As of December 31, 2010, the building represents: A cash-generating unit (CGU) under IFRSs. A long-lived asset classified as held and used under U.S. GAAP. In December 2010, one of Ida’s competitors sold its commercial building for an amount significantly less than its asking price. The competitor’s building is located across the street from Ida’s building, has approximately the same square footage, and was built five years after Ida’s building was constructed. In preparing its 2010 financial statements, Ida’s management has provided the following information regarding the building as of December 31, 2010 (assume these values have been evaluated by Ida’s independent auditor and found to be reliable): Ida’s Building 12/31/10 (in thousands) Carrying amount $4,500 Value in use $4,000 Fair market value less cost to sell $3,800 Fair market value $3,900 Undiscounted future cash flows
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us_10_2c_idas_impairment_case_082111 - Case 10-2 Idas...

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