For each question, (1) provide the citation number (topic and subtopic) that addresses the question and (2) answer the question. Document this under the question, indenting your answer or otherwise indicating it is the answer (bold, underline, different color, etc.)

1. Asset Impairments

Your client provides warehousing services for companies in several midwestern cities. The client has not been performing well due to increased competition and the loss of several customers that have recently gone out of business. Your client suspects that the plant and equipment may be impaired and wonders whether those assets should be written down. Given the company's prior success, this issue has never arisen in the past. Your client has asked you to assist researching this issue.

(a) What is the primary authoritative guidance for asset impairments? Briefly discuss the scope of the standard (i.e., explain the types of transactions to which the standard applies).

(b) Give several examples of events that would cause an asset to be tested for impairment.

(c) What is the best evidence of fair value? Describe alternate methods of estimating fair value?

(d) Does it appear that ABC should perform an impairment test? Explain.