A firm owns machinery that, due to changes in industry conditions, may now be impaired.

a. discuss the procedure that the firm must follow under GAAP to decide whether impairment has occurred.

b. discuss the alternatives available to measure the impairment

c. discuss the effect of the impairment recognition on each of the following in the year of recognition and the year following recognition.

i. reported net income

ii. income from continuing operations

iii. cash from operations

iv. shareholders' equity

v. return on equity

vi. asset turnover