Question
Assume Deere management is considering an impairment charge on some manufacturing assets. Assume the assets under consideration for impairment originally cost $300 million and have
Assume Deere management is considering an impairment charge on some manufacturing assets. Assume the assets under consideration for impairment originally cost $300 million and have accumulated depreciation in the amount of $125 million. Assume Deere management has estimated the fair-value of the assets under consideration to be $75 million and the remaining future cash flows to be $110 million. If Deere management decides to book (i.e., record) an asset impairment charge, determine the dollar amount of the charge. Also, what will the balance sheet value (i.e., book value) of the assets be immediately after the charge?
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