Chapter 11 ACCT 3113

What are the issues when accounting for impairments?

How to measure the impairment loss. When to recognize the impairment.

Which of the following statements correctly describes the treatment of the recovery of previously recognized goodwill impairment losses under IFRS and U.S. GAAP?

Impairment losses cannot be reversed

A(n) _______________ is an operating segment of a company or a component of an operating segment for which discrete financial information is available and management regularly reviews the operating results of that component

Reporting Unit

When accounting for impairments, the two categories for recognizing and measuring the loss are

assets to be held and used and assets held for sale.

The two categories for intangible assets are

intangibles with indefinite lives. intangibles with finite lives.

For plant, property, and equipment, U.S. GAAP requires the investigation of possible impairment

only if events or changes in circumstances indicate that the asset may not be recoverable.

A change in depreciation method is treated as a change in estimate that is achieved by a change in accounting principle, and is accounted for

prospectively in the current and future periods.

The useful life of an intangible asset may be limited by what type of provisions?

regulatory legal contractual

In determining whether an impairment loss should be recognized for goodwill, a company compares the book value of the reporting unit with

the fair value of the reporting unit.

Which of the following accounting changes must be justified in the notes to the financial statements?

Changes in depreciation methods