Comparative Analysis of US GAAP and IFRS In both the U.S. GAAP and IFRS settings, fixed assets are initially valued at cost. After initial recognition, IFRS allows fixed assets to be adjusted to fair value. The fair value alternative is not used often due to the appraisal costs involved. IFRS requires component depreciation when patterns of economic benefits differ from the main asset. On the other hand, under U.S. GAAP, component depreciation is permitted but is not required. A large fixed asset such as an airplane may be depreciated as one item under U.S. GAAP, while in an IFRS environment, various parts or components of the airplane may have different useful lives and residual values. This means that depreciation expenses under these scenarios may be different. Sometimes the depreciation expense may be higher using IFRS and sometimes it may be lower compared to U.S. GAAP. In some cases, fixed assets may become useless, resulting in asset impairment. Impairment of a fixed asset is an unexpected decrease of its fair value due to damage, technology changes, and so on. When impairment of a fixed asset occurs, the business has to decrease its value in the balance sheet and recognize a loss in the income statement. Instructions: Respond to the following: Based on the materials covered in this module, compare and contrast the recording of fixed assets under U.S. GAAP and IFRS. Support your discussion with appropriate academically reviewed materials. Consider using Campbellsville University library to find appropriate materials. How would you determine the impairment of fixed assets? Provide an appropriate numerical example to support your response.