- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 23. Long-lived Assets
- Subject 5. Impairment of Assets
CFA Practice Question
Under U.S. GAAP, if the fair value of an impaired long-term asset is not readily determinable, it should be shown on the balance sheet at historical cost less accumulated depreciation. True or False?
Correct Answer: False
If the fair value of an impaired asset is not readily determinable, its value should be estimated by discounting expected future net operating cash flows. This is not equal to cost less accumulated depreciation.
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | Ok, if FV of LT asset is not readily determinable then it should shown on the balance sheet as the discounted expected future net operating cash flows |
| ehc0791 | If you come up some number, that means you determine the value which is conflic with "Not dterminable" |
| cong | If the fair value of an impaired long-term asset is not readily determinable, it should be shown on the B/S on a discount basis. |