What is impairment? Discuss how to determine when long-lived asset impairment exists (i.e. tangible and intangible)....

What is impairment? Discuss how to determine when long-lived asset impairment exists (i.e. tangible and intangible). Give specific examples of assets that are regularly tested for impairment. What is the journal entry when it has been determined that an asset has been impaired.

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Expert Solution

WHAT IS IMPAIRMENT-

An asset is carried at more than its recoverable amt if its carrying amt exceed the amt to be recover through use or sale of the assets. This is the case the asset is describe as impaired and treat accordingly.

EXAMPLES OF ASSETS-

Fixed assets and investment property. Not applicable to financial assets(Debtor, billsrl receivable, cash ,deferred tax assets or investment in shares etc.)

ACCOUNTING TREATMENT

Revaluation Reserve a/c Dr.

Profit and loss a/c . Dr.

To provision for impairment loss a/c

HOW TO DETERMINE-

jeff jeffy answered 1 year ago

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