level: Impairment
Questions and Answers List
level questions: Impairment
| Question | Answer |
|---|---|
| US GAAP Impairment Test: 1) General Rule 2) Exceptions and Rules | 1) Sum of Undiscounted CFs > CV = Impaired; Impairment = FV - CV 2) Intangible Assets with Indefinite Lives; FV - CV if negative is impairment/amount impaired If assets are held for sale, then add disposal costs to impairment loss |
| IFRS Impairment Test: 1) General Rule 2) Exceptions and Rules | 1) Higher of NRV or PVFCF = Recoverable Amt; RA - CV = Impairment Loss if Negative 2) No exceptions |
| Are reversals of impairment allowed? | US GAAP: No (except if classified as a FA Held for Sale/Disposal) IFRS: Yes (except for Goodwill) |
| Evaluation of Goodwill for Impairment | IN BOTH CASES GW CANNOT BE NEGATIVE US= Reporting Unit (Operating Segment) IFRS= Cash-bearing Unit Level (Smallest Identifiable) |