Question 1

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Accepted Answer

A) True 
 B)False

Question 2

Under IFRS,the smallest identifiable group of assets that provides cash inflows is called a ________.

Accepted Answer

A) reporting unit 
B) operating unit 
C) cash-providing unit 
D) cash-generating unit 
A) reporting unit 
B) operating unit 
C) cash-providing unit 
D) cash-generating unit

Question 3

In 2011,Sopkiewicz International acquired production machinery at a cost of €860,000,which now has a book value of €380,000.The value in use of the machinery is €335,000.and it's fair value is €290,000.
a.Determine if an impairment loss has occurred.Explain.
b.If an impairment loss has occurred,provide the journal entry to record the impairment loss and determine the new carrying value of the machinery.

Accepted Answer

a.
 The recoverable value (value in use

Question 4

A firm recognizing an impairment loss must disclose both the asset or asset group impaired and the method used to estimate its fair value.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statement regarding long-term operating assets classified as held for sale or disposal is true?

Accepted Answer

A) Long-term operating assets classified as held for disposal are valued at historical cost. 
B) Companies may only depreciate long-term operating assets classified as held for sale or disposal on a straight-line basis. 
C) If the company writes down the asset in one period,the company can report an increase in value in the subsequent period if the fair value has materially increased. 
D) Long-term operating assets classified as held for disposal are valued at undepreciated cost. 
A) Long-term operating assets classified as held for disposal are valued at historical cost. 
B) Companies may only depreciate long-term operating assets classified as held for sale or disposal on a straight-line basis. 
C) If the company writes down the asset in one period,the company can report an increase in value in the subsequent period if the fair value has materially increased. 
D) Long-term operating assets classified as held for disposal are valued at undepreciated cost.

Question 6

Regular Corp.has four divisions.One of them,Zolo Products,was acquired on January 1,2016,for $400,000,000,and recorded goodwill of $50,750,000 as a result of that purchase.At December 31,2016,Zolo Products had a recoverable amount of $375,000,000.The carrying value of the company's net assets at December 31,2016 was $355,000,000 (including goodwill).What amount of loss on impairment of goodwill should Regular record in 2016?

Accepted Answer

A) $45,000,000 
B) $25,000,000 
C) $20,000,000 
D) -0- 
A) $45,000,000 
B) $25,000,000 
C) $20,000,000 
D) -0-

Question 7

The first step of the impairment test is assessing asset recoverability.

Accepted Answer

A) True 
 B)False

Question 8

When recording an impairment loss,the firm eliminates the balance in the accumulated depreciation or accumulated amortization account,and then reduces the asset account.

Accepted Answer

A) True 
 B)False

Question 9

A company selling or disposing of an asset measures the asset at the lower of cost or net realizable value.

Accepted Answer

A) True 
 B)False

Question 10

Deluxe Corp.has four international divisions.One of them,Pere Products,was acquired on January 1,2016,for £400,000,000,and recorded goodwill of £50,000,000 as a result of that purchase.At December 31,2016,Pere Products had a recoverable amount of £375,000,000.The total book value of Pere Products was £355,000,000 (including goodwill).What amount of loss on impairment of goodwill should Deluxe record in 2016?

Accepted Answer

A) $45,000,000 
B) $25,000,000 
C) $20,000,000 
D) -0- 
A) $45,000,000 
B) $25,000,000 
C) $20,000,000 
D) -0-

Question 11

In 2011,Bellding Inc.acquired production machinery at a cost of £630,000,which now has accumulated depreciation of £380,000.The value in use of the machinery is £195,000.and it's fair value let cost to sell is £225,000.What amount should Condor recognize as a loss on impairment?

Accepted Answer

A) £155,000 
B) £30,000 
C) £25,000 
D) -0- 
A) £155,000 
B) £30,000 
C) £25,000 
D) -0-

Question 12

When testing for impairment of goodwill,the recoverable amount of the cash-generating unit is calculated as ________.

Accepted Answer

A) the greater of the implied fair value of goodwill and the value in use of goodwill 
B) the greater of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit 
C) the lesser of the implied fair value of goodwill and the value in use of goodwill 
D) the lesser of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit 
A) the greater of the implied fair value of goodwill and the value in use of goodwill 
B) the greater of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit 
C) the lesser of the implied fair value of goodwill and the value in use of goodwill 
D) the lesser of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit

Question 13

U.S.GAAP does not permit subsequent reversals of goodwill impairment losses.

Accepted Answer

A) True 
 B)False

Question 14

In 2009,Heisenburg Company acquired production machinery at a cost of €620,000,which now has a accumulated depreciation of €340,000.The value in use of the asset is €290,000 and it's fair value less cost to sell is €245,000.What amount should Condor recognize as a loss on impairment?

Accepted Answer

A) €50,000 
B) €35,000 
C) €10,000 
D) -0- 
A) €50,000 
B) €35,000 
C) €10,000 
D) -0-

Question 15

Doowow Chemical Company determines that an extruder machine used in its operations has suffered an impairment in value because of technological changes.An entry to record the impairment should include ________.

Accepted Answer

A) a debit to the machinery accumulated depreciation account 
B) a debit to the machinery account 
C) a credit to machinery depreciation expense account 
D) a credit to the loss on impairment account 
A) a debit to the machinery accumulated depreciation account 
B) a debit to the machinery account 
C) a credit to machinery depreciation expense account 
D) a credit to the loss on impairment account

Question 16

Explain the IFRS impairment test process including determination of the amount of the impairment loss,if any.

Accepted Answer

IFRS uses a one-step impairment test tha

Question 17

Which of the following is not a required disclosure requirement under both U.S.GAAP and IFRS?

Accepted Answer

A) The events and circumstances that led to the recognition of the impairment. 
B) The method used to estimate the fair value of the asset. 
C) The amount of any impairment loss reversal if not separately disclosed in the income statement. 
D) The asset that was impaired. 
A) The events and circumstances that led to the recognition of the impairment. 
B) The method used to estimate the fair value of the asset. 
C) The amount of any impairment loss reversal if not separately disclosed in the income statement. 
D) The asset that was impaired.

Question 18

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Accepted Answer

A) True 
 B)False

Question 19

Under IFRS,firms report a reversal of an impairment loss as other comprehensive income.

Accepted Answer

A) True 
 B)False

Question 20

The journal entry to record an impairment loss for an indefinite-life intangible asset includes which of the following?

Accepted Answer

A) debit the intangible asset 
B) credit the intangible asset 
C) debit accumulated amortization for the asset 
D) credit accumulated amortization for the asset 
A) debit the intangible asset 
B) credit the intangible asset 
C) debit accumulated amortization for the asset 
D) credit accumulated amortization for the asset

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Under IFRS,the smallest identifiable group of assets that provides cash inflows is called a ________.

A firm recognizing an impairment loss must disclose both the asset or asset group impaired and the method used to estimate its fair value.

Which of the following statement regarding long-term operating assets classified as held for sale or disposal is true?

The first step of the impairment test is assessing asset recoverability.

When recording an impairment loss,the firm eliminates the balance in the accumulated depreciation or accumulated amortization account,and then reduces the asset account.

A company selling or disposing of an asset measures the asset at the lower of cost or net realizable value.

In 2011,Bellding Inc.acquired production machinery at a cost of £630,000,which now has accumulated depreciation of £380,000.The value in use of the machinery is £195,000.and it's fair value let cost to sell is £225,000.What amount should Condor recognize as a loss on impairment?

When testing for impairment of goodwill,the recoverable amount of the cash-generating unit is calculated as ________.

U.S.GAAP does not permit subsequent reversals of goodwill impairment losses.

In 2009,Heisenburg Company acquired production machinery at a cost of €620,000,which now has a accumulated depreciation of €340,000.The value in use of the asset is €290,000 and it's fair value less cost to sell is €245,000.What amount should Condor recognize as a loss on impairment?

Doowow Chemical Company determines that an extruder machine used in its operations has suffered an impairment in value because of technological changes.An entry to record the impairment should include ________.

Explain the IFRS impairment test process including determination of the amount of the impairment loss,if any.

Which of the following is not a required disclosure requirement under both U.S.GAAP and IFRS?

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Under IFRS,firms report a reversal of an impairment loss as other comprehensive income.

The journal entry to record an impairment loss for an indefinite-life intangible asset includes which of the following?

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters

Exam 13: Long-Term Operating Assets: Departures From Historical Cost

All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.

Under IFRS,the smallest identifiable group of assets that provides cash inflows is called a ________.

A firm recognizing an impairment loss must disclose both the asset or asset group impaired and the method used to estimate its fair value.

Which of the following statement regarding long-term operating assets classified as held for sale or disposal is true?

The first step of the impairment test is assessing asset recoverability.

When recording an impairment loss,the firm eliminates the balance in the accumulated depreciation or accumulated amortization account,and then reduces the asset account.

A company selling or disposing of an asset measures the asset at the lower of cost or net realizable value.

In 2011,Bellding Inc.acquired production machinery at a cost of £630,000,which now has accumulated depreciation of £380,000.The value in use of the machinery is £195,000.and it's fair value let cost to sell is £225,000.What amount should Condor recognize as a loss on impairment?

When testing for impairment of goodwill,the recoverable amount of the cash-generating unit is calculated as ________.

U.S.GAAP does not permit subsequent reversals of goodwill impairment losses.

In 2009,Heisenburg Company acquired production machinery at a cost of €620,000,which now has a accumulated depreciation of €340,000.The value in use of the asset is €290,000 and it's fair value less cost to sell is €245,000.What amount should Condor recognize as a loss on impairment?

Doowow Chemical Company determines that an extruder machine used in its operations has suffered an impairment in value because of technological changes.An entry to record the impairment should include ________.

Explain the IFRS impairment test process including determination of the amount of the impairment loss,if any.

Which of the following is not a required disclosure requirement under both U.S.GAAP and IFRS?

Impairment testing is conducted annually for both limited-life and indefinite-life intangible assets.

Under IFRS,firms report a reversal of an impairment loss as other comprehensive income.

The journal entry to record an impairment loss for an indefinite-life intangible asset includes which of the following?

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters