According to U.S. GAAP, all of the following statements about impaired tangible assets are true except:...

According to U.S. GAAP, all of the following statements about impaired tangible assets are true except:

Group of answer choices

A) When a write-down is based on future cash flow, fair value is used.

B) Assets idled for more than three years are impaired and must be written down.

C) An asset is impaired when its book value exceeds future undiscounted cash flow.

Solutions

Expert Solution

As per the US GAAP, an asset is considered impaired when the book value of an asset exceeds the future expected cash flows/ future undiscounted cash flows. Certaon conditions may have caused the value of the asset to fall, such as changes in demand, changes in the physical condition or some legal factors which has led to the fall in the price of the asset.

So, the correct option is option C.

jeff jeffy answered 2 years ago

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