| Assets
to be Held and Used |
|
Recognition and
Measurement of Impairment |
| 4 |
A company should review its
assets for possible impairment whenever the following types of events occur: |
|
a. |
A significant decrease in the
market value of an asset. |
|
b. |
A significant change in the way an asset
is used. |
|
c. |
A significant adverse change in legal factors
in the business climate. |
|
d. |
Asset acquisition or construction cost significantly
greater than expected, and |
|
e. |
Forecast of continuing losses associated
with an asset |
| 6. |
If these events indicate that
the carrying amount of
an asset...may not be recoverable, the entity shall estimate the future
cash flows expected to result
from the use and disposition of the asset. |
|
If the sum of the expected future
undiscounted cash flows is less than the carrying amount of the asset,
the entity shall recognize an impairment loss; otherwise an impairment
loss shall not be recognized. |
|
An entity should recognize an
impairment loss only when the fair value of
an asset is less than its carrying amount. |
| 7 |
Fair value is the amount at
which the asset could be bought or sold in a current transaction (other
than in a forced or liquidation sale.) |
|
The impairment loss should be
measured based on the fair value of the asset, when reasonably estimatable,
or based on the present value of estimated future cash flows from the asset... |
| 11 |
After the impairment is recognized,
the reduced carrying amount shall be accounted for as the asset's new cost. |
|
No restoration of a previously
recognized impairment loss is allowed. |
| Reporting |
| 13 |
An impairment loss for assets
to be held and used shall be reported as a component
of income from continuing operations |
| Disclosure |
| 14 |
a. |
a description of the impaired asset and,
reasons for the impairment |
|
b. |
the amount of the impairment loss and how
fair value was determined. |
|
c. |
The caption in the income statement . .
. in which the impairment loss is aggregated |
|
d. |
if applicable, the business segment or segments,
affected. |
| Assets
to be Disposed Of |
|
Recognition and Measurement |
| 15 |
All long-lived assets and certain
identifiable intangible assets not covered by Opinion No. 30 that are to
be disposed of shall e reported at the lower of carrying
amount or fair value less cost to sell. Fair
value measured in accordance with paragraph 7 of this document |
| 16 |
Cost to sell an asset generally
included the incremental direct costs to transact the sale of the asset
such as broker commissions, legal and title transfer fees, and closing
costs. |
| 17 |
Subsequent revisions in estimates
of fair value less cost to sell shall be reported as adjustments to the
carrying amount of an asset to be disposed of, provided that the carrying
amount of the asset does not exceed the carrying amount of the asset before
an adjustment was made to reflect the decision to dispose of the asset. |
| 18 |
gains or losses resulting from
application of paragraph 15-17 shall report the gains or losses resulting
from the application of those paragraphs as a component of income from
continuing operations before taxes.... |
| 19 |
Disclosures |
|
a. |
A description of assets to be disposed of,
facts and circumstance leading to the expected disposal, the expected disposal
date, and the carrying amount of the asset. |
|
b. |
If applicable, the business segment(s) in
which asset to be disposed of are held. |
|
c. |
The loss, if any, resulting from the application
of paragraph 15 of this statement. |
|
d. |
The gain or loss, if any, resulting from
changes in the carrying amounts of assets to be disposed of that arises
from application of paragraph 17 of this statement. |
|
e. |
The caption in the income statement in which
gains or losses in (c) and (d) are aggregated if those gains or losses
have not been presented as a separate caption or reported parenthetically
on the face of the income statement. |
|
f. |
The results of operations for assets to
be disposed of to the extent that those results are included in the entity's
results of operations for the period and can be identified. |