BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Explain the Impairment of Property, Plant, and Equipment and Intangible Assets. An asset is said to be impaired when its carrying amount is greater than its recoverable amount or fair value. Impairment losses will be recognized whenever the asset’s carrying amount is not recoverable.

Detailed explanation-2: -The carrying value of property is impaired when it exceeds the property’s fair value. When this occurs, US GAAP requires that the property’s carrying value is written down to its fair value and that an impairment loss is recognized.

Detailed explanation-3: -IAS 36 also applies to groups of assets that do not generate cash flows individually (known as cash-generating units). IAS 36 applies to all assets except those for which other Standards address impairment.

Detailed explanation-4: -To calculate the impairment of an asset, take the carrying value of the asset (its historical cost minus accumulated depreciation) and subtract its fair market value. If its fair market value is less than the carrying value, you will need to record an impairment loss for the difference.

Detailed explanation-5: -Under GAAP, an impaired asset must be recorded as a loss on the income statement. It is important to compare the value of the asset to the fair market value to help determine the loss.