Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
This is then compared to the carrying amount, which is $4 million. So the value of the asset is less than what is owing. The impairment would be $4 - $1.93 = $2.07 million.
A change in the scenarios would affect the net present value calculation, or the value of the future cash flows. The new figure would be as follows:
Cash Flow Scenarios
Flows
Outcome
Probability
1
2
3
4
5
NPV
WNPV
A
0.5
1
0.9
0.7
0.7
0.7
$3.33
$1.66
B
0.4
0.6
0.8
1.1
1.6
1.9
$4.73
$1.89
C
0.1
1
0
0
0
0
$0.93
$0.09
$3.65
d
0.07
In this scenario, the impairment would be $350,000. The impairment is lower because the present value of the expected future cash flows is higher, given that more weight is placed on the options that have a higher NPV.
FASB For the purposes of performing the recoverability test, the following assets and liabilities should be included in the asset group. The cruise ship is part of the asset group, and the liabilities would be any liabilities that are transferred with the asset. The asset group would be "the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets or liabilities," which
Some mergers and acquisitions (M&as) did not generate any goodwill because they were accounted for using the pooling-of-interests method. In 1969, Leonard M. Savoie (then Executive Vice President of the AICPA) stated that he expected the then-prevailing accounting pronouncement authority, the Accounting Principles Board (APB), to abolish the pooling of interests method. However, the death-knell for this accounting method was not sounded until 2001 with the issuance of SEAS
Corporate Taxation Provisions and Principles Corporate Taxation Congress' Reaction to the Holding in Chamberlin v. Commissioner (1953) Prior to passage of the IRS Tax Code by the 83rd Session of Congress in 1954 the tax status of stock dividends relative to its recipient was debatable, but this did not stop corporate tax planners from devising 'preferred stock bailouts' (Bailine, 2004). Under normal circumstances, when an owner of a company invests earnings and profits
Community Diagnosis: Pearland, Texas Community Diagnosis The community of Pearland is an ethnically-diverse, growing community located adjacent to the thriving metropolis of Houston, Texas (PEDC, n.d.). The population for the community was estimated to be 93,305 in 2011, up by 2.25% from the previous year (Census, 2013a). By comparison, the U.S. population grew by just 1.67%. There are slightly more females than males (51.4 vs. 48.6%) in Pearland and the median age
Mergers and Acquisition Company Acquisition As a CEO, you are trying to acquire a foreign firm. The size of your firm will double and it will become the largest in your industry. What does your firm do and what does the foreign firm you are trying to acquire do? Where are the firms based? look company is a major company in Ohio Columbus in the U.S. And specializes is the sale of all
Caregivers of individuals with AD Caregivers of Individuals with Alzheimer's Disease Alzheimer's disease is a terribly debilitating disease that strikes older adults and for which there is no known cure. According to the Institute on Aging, Alzheimer's disease is "an irreversible, progressive brain disease that slowly destroys memory and thinking skills, and eventually even the ability to carry out the simplest tasks." (2012, p.1) Alzheimer's disease is named after Dr. Alois Alzheimer.