Question
Declarmen Corporation owns factory in the United Kingdom. A change in business climate indicates that Declarmen should investigate for possible impairment. Below are date related
Declarmen Corporation owns factory in the United Kingdom. A change in business climate indicates that Declarmen should investigate for possible impairment. Below are date related to the factorys assets ($ in millions):
| Book value | $ | 570 | |
| Undiscounted sum of future estimated cash flows | 630 | ||
| Present value of future cash flows | 525 | ||
| Fair value less cost to sell (determined by appraisal) | 540 | ||
The amount of impairment loss that Declarmen should recognize according to U.S. GAAP is:
Multiple Choice
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None.
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$30 million.
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$60 million.
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$45 million.
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
