Day 20

Question 1

Impairment loss: what is the fair value

Answer 1

Estimated future Gross revenue
Less: Disposal cost

= Fair Value

MCQ-08611

Question 2

Can you reverse an impairment loss?

Answer 2

No

A reversal can only be recorded if the asset is held for disposal

MCQ-13095

Question 3

Which assets are subject to the recoverability test when testing for impairment?

Answer 3

A Patent

The recoverability test is only performed on intangible assets with a LIMITED LIFE

MCQ-04284

Question 4

When is an impairment loss booked on the income Stmt?

Answer 4

When fair value is LESS THAN the carrying amount

A loss on impairment is booked to the IS

MCQ-06603

Question 5

True or False: Impairment losses are shown on the IS net of tax

Answer 5

False

Impairment losses are shown as a component of income BEFORE tax

MCQ-05118

Question 6

When is an asset considered impaired?

Answer 6

The carrying amount of an asset is GREATER THAN it’s fair value

&

The carrying amount is non-recoverable

MCQ-05238

Question 7

What is the first step in determining if an asset is impaired?

Answer 7

Compare the Carrying Amount to the Undiscounted Expected Future Cash Flows

MCQ-05678

Question 8

How do you calculate impairment loss?

Answer 8

1. If the sum of the Undiscounted Expected Future Cash Flows is LESS THAN the Carrying Amount = recognize impairment loss

The amount of the Impairment loss = Carrying Amount - Fair Value

MCQ-07230

Question 9

How is depreciable property constructed on leased land depreciated?

Answer 9

Over the life of the property or the term of the lease, whichever is shorter

EX: Constructing a bldg on leased land

MCQ-00383

Question 10

A major research university receives over half of its grant funding from a single federal government agency. The university’s rational for disclosing this in the notes of the FS is:

Answer 10

To Show the vulnerability if that particular funding source were to disappear

MCQ-09754

Question 11

What is included in Other Comprehensive Income?

PUFI

Answer 11

Pension adjustments
Unrealized gains & losses on Available-For-Sale debt Securities and Hedges
Foreign Currency Items
Instrument-Specific credit risk

MCQ-09289

Question 12

What effect does an overstatement of Inventory by $300k in the PY have on CY Adjusted Income from continuing operations before tax?

Answer 12

Add $300k back to CY Income

Plus: Adjustment to COGS for Inventory misstatement

MCQ-09319