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Basic Question 8 of 15
The information below applies to a manufacturing equipment held for use:
Carrying value: $200k
Undiscounted future cash flows: $220k
Discounted future cash flows: $180k
Fair value: $170k
Under U.S. GAAP, how much should the impairment loss be?
User Contributed Comments 5
| User | Comment |
|---|---|
| cong | Very good question. |
| endurance | cong, you're right |
| johntan1979 | i'm lovin' it |
| davcer | sometimes you go directly to the calculations without verifying if u really need it. |
| Sp1993 | Bloody good question. Lesson to be learnt - don't jump straight in to the calculations when you see indicative figures, take a step back and look for what the question is really testing. |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain and evaluate how impairment and derecognition of property, plant, and equipment and intangible assets affect the financial statements and ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 7.