Assets A, B, and C comprise an asset group. Asset B is considered to be the principal asset in this group. Asset B has a three-year estimated life and A and C have remaining lives of four years. Data on the expected undiscounted cash flows of the three assets, their book values (carrying values), and their fair values less costs to dispose are shown below:

Required:
(a) Determine the amount of impairment according to SFAS Nos. 121 and 144.
(b) By how much should each of the assets be written down?
(c) What theoretical problems do you see with the application of SFAS Nos. 121 and 144 t impairments?

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Undiscounted caslh flows by year S18,000 S80,000 S12,000 15,000 70,000 10,000 12,00065,000 9,000 6,000 4 10,000 Book value S60,000 S220,000 S20,000 Fair value less S65,000 S18,000 S25,000 Disposal costs