CFA Practice Question

CFA Practice Question

Which of the following statements about asset impairment is TRUE? Under U.S. GAAP ______
A. assets remaining in use can be written off to the extent of impairment without any further depreciation.
B. assets held for sale cannot be written down if their value is impaired.
C. after assets held for sale have been written down, they can be written up only to the extent of their earlier writeoff if their value rebounds.
Explanation: Assets held for sale can be written back up by the extent of their previous writeoff if their value rebounds subsequently.

User Contributed Comments 6

User Comment
danlan I think C is wrong.
eddeb Make sure you read "held for sale" which has different impairment rules than for "long-lived" assets.

Check your LOS, C is correct.
Carol1 Assest can be written down when it is using as the situations: 1 Use;2 Technology;3 Market value;4 decrease the long run profitability of assests;
Assests can be written down when it is hold for sale but can only be written up as the previous value.
jpducros Under IAS, Write up of impairment is possible, whatever the use of the asset, but it is still capped.
tomasdg Doesn't US GAAP prohibit writing up an asset after it had been written off?
tomasdg Right, held for sale. C is correct.
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