TBS 5- Code Research

Question 1

The demand for eTextbooks has risen in recent years. Enlighten Corp., an educational publisher, has recently shifted its focus away from printing textbooks to creating eTextbooks. Management fears that Enlighten’s printing equipment might be impaired. They have provided you with the following information:
Carrying amount $845,000
Fair value 650,000
Sum of undiscounted cash flows 725,000

Answer 1

FASB ASC 360-10

An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability, whether in use (see paragraph 360-10-35-33) or under development (see paragraph 360-10