A2 Auto Corporation

The following are the required steps to identify, recognize and measure the impairment of a long-lived asset (group) to be held and used:

1. When is a company required to perform the two-step test for goodwill impairment? Explain in your own words and provide citation from the ASC.

Section 504 and the ADA use three descriptions to define who is covered under the legislation. Type one is a person that has a physical or mental impairment that limits them through at least one essential life activity. Type two is a person that has a history of mental or physical issues. Type three is covered as a person that is seems to have a mental or physical impairment. A physical impairment is defined as a physiological condition, cosmetic deformity, or an anatomical loss affecting one or more body systems. Epilepsy, cerebral palsy, cancer, and hemophilia are all examples of physical impairments. A mental impairment is defined as anything that is psychological such as a specific learning disability or mental retardation like ADD or drug or alcohol addictions. Therefore, any person that is listed under any of the above-mentioned classifications or their relative classifications should be eligible for ADA and Section 504 coverage.

Where explain the concept of Intangible asset, which represents assets that absence of physical substance. Moreover, Goodwill represents an asset from which is expected future economic benefits, emerge from the acquisition of other assets or business combination. Another important point would be the impartments testing as refers ASC 350-20-35-28 where indicates that Goodwill of reporting unit must be tested for impairment annually. The test can be accomplished at any time in the fiscal year. In the case of different reporting unit, the impairment test could be at different times. This citation in the memorandum was provided incorrect (ASC 305-20-35-1 and 28) this encoding does not exist in FASB.

The following are the required steps to identify, recognize and measure the impairment of a long-lived asset (group) to be held and used:

Based on ASC 320-10-35-34 I mentioned above, the other-than-temporary impairment should be recoded as $28 ($100-$72) as of December 31, 20X1. On January 31, 20X2, when the price of the stock went up to $75, the other-than-temporary impairment should be recoded as $25 ($100-$75). If the share price was $95 instead of $75 on January 31, 20X2, I think no other-than-temporary impairment needs to be recorded, because there is no material decrease occurred.

The following are the required steps to identify, recognize and measure the impairment of a long-lived asset (group) to be held and used:

10. Disability – disability or specific requirements need to be taken in account when carrying out any assessment /observation or a child can be underestimated and the observation will be unreliable.

According to Section 360-10-35-21, examples of events that would cause an asset to be tested for impairment include a significant decrease in the market price of a long-lived asset, or a asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, or asset group, and a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group.

The authoritative guidance for asset impairment is to ensure that impairment is recorded and dealt with as depreciation. The scope of the standard is writing off of assets and depreciation. According to the guidance of 360-10-35, it address how long-lived assets that are intended to be held and used in an entity’s business shall be reviewed for impairment. The impairment loss can only be recognized if the carrying amount of a long-lived assets is not recoverable and

If these estimated undiscounted future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the excess, if any, of the asset’s carrying value over its estimated fair value.

When your impairment affects your skin and has effects in other body systems, the predominant features of your impairment are evaluated first. Some example include:

Tim Krumwiede College of Business Bryant University Smithfield, Rhode Island USA Emily Giannini Graduate Student, College of Business Bryant University Smithfield, Rhode Island USA ABSTRACT This case requires a detailed analysis of impairments of both long-lived assets and goodwill for First Motors Corporation, a fictitious automobile company. By integrating multiple issues into this case, students are presented with some of the complexities and interrelationships that are seen in practice. To properly prepare solutions to this case, students must successfully read, interpret, and apply both accounting standards

After initial recognition, the IAS38 permits the entities to choose between the “cost model” and the “revaluation model” to measure the brand. In the cost model, the intangible assets are carried at cost less accumulated amortization and accumulated impairment losses (Austin, 2007). In this case, the company needs to decide the intangible asset’s useful life objectively and choose a proper method to amortize the intangible assets. While the revaluation model measure intangible assets at a revalued amount. According to IAS38, the fair value of intangible assets must be estimated by reference to an active market in that kind of assets. Therefore, if the brand doesn’t have an active market, the recent price cannot be treated as a fair value and the revaluation model should not be applied to it as well. Compared with the tangible market, such as houses, inventories and machines, the intangible market is imperfections (Alali and Cao, 2010). Therefore, it is difficult to get a

Goodwill Impairment is a charge that record companies when goodwill carrying value on financial statements exceeds its fair value. Goodwill impairment happens when there is deteriorating capabilities in acquired assets that generate cash flows, and when the fair value of the goodwill falls below its book value. It’s an earnings charge that companies record on their income statement after they recognize that there is a good amount of evidence that an asset connected with goodwill can no longer show financial results that were expected from the asset at the time of the purchase. Change in accounting standards for Goodwill started because of the accounting standards of 2000-2001. Firms artificially inflated their balance sheets by reporting exaggerated values of goodwill, which was allowed at that time for its rules saying they may be amortized over its estimated useful life. There is an annual test required by all companies to review their goodwill impairment in the “Events that may trigger goodwill impairment include deterioration in economic conditions, increased competition, loss of key personnel and regulatory action. The definition of a reporting unit plays a crucial role during the test; it is defined as the business unit that a company's management reviews and evaluates as a separate segment.” (Investopedia) It’s identified in two steps. “First, a company must compare the fair value of a reporting unit to its carrying value on the balance