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Impairment of long-lived assets, goodwill and intangible assets US GAAP and IFRS Media & EntertainmentContents2 6 8 12 20 22Overview of impairment principlesIndicators of impairment for long-lived

How to fill out impairment of long-lived assets

How to fill out impairment of long-lived assets:

1. Identify the long-lived assets: Begin by identifying the assets that might be subject to impairment. These assets can include property, equipment, intangible assets, and other long-term assets.
2. Assess the carrying value: Determine the carrying value of each asset, which is the asset's original cost minus any accumulated depreciation or amortization. This will give you the asset's net book value.
3. Compare carrying value with the fair value: Determine the fair value of the asset, which is the amount that the asset could be sold for in an open market transaction. Compare the fair value to the carrying value to assess if there is a potential impairment.
4. Calculate the impairment loss: If the carrying value exceeds the fair value, calculate the impairment loss. This is the difference between the carrying value and the fair value and represents the amount that needs to be written off.
5. Recognize the impairment loss: Record the impairment loss as an expense in the income statement and reduce the carrying value of the asset on the balance sheet. This adjustment should be made in accordance with the accounting standards and guidelines applicable in your jurisdiction.

Who needs impairment of long-lived assets:

1. Companies: Impairment of long-lived assets is necessary for companies that have long-term assets on their balance sheets. It helps them accurately reflect the value of their assets and their financial position.
2. Investors: Impairment of long-lived assets is vital for investors as it provides insights into the financial health and value of the company. Impairment losses can affect the company's profitability and overall performance.
3. Regulators and auditors: Impairment of long-lived assets is an essential aspect of financial reporting and compliance. Regulators and auditors review the impairment assessments to ensure that they are accurate and in line with accounting standards and regulations.
4. Stakeholders: Impairment of long-lived assets is relevant for stakeholders such as creditors, suppliers, and employees. They rely on accurate financial information to assess the company's ability to meet its financial obligations and make informed decisions.

In conclusion, filling out impairment of long-lived assets involves identifying the assets, assessing their carrying value, comparing it with their fair value, calculating the impairment loss, and recognizing it in the financial statements. This process is important for various entities, including companies, investors, regulators, and stakeholders, to ensure accurate financial reporting and decision-making.

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What is impairment of long-lived assets?

Impairment of long-lived assets occurs when the carrying amount of an asset exceeds its recoverable amount.

Who is required to file impairment of long-lived assets?

Companies that hold long-lived assets such as property, plant, and equipment are required to file impairment of long-lived assets if there are indicators of impairment.

How to fill out impairment of long-lived assets?

Impairment of long-lived assets is filled out by assessing the carrying amount of the asset and comparing it to its recoverable amount. If the carrying amount exceeds the recoverable amount, the asset is impaired.

What is the purpose of impairment of long-lived assets?

The purpose of impairment of long-lived assets is to ensure that assets are carried on the financial statements at their recoverable amount, and not at a value higher than their recoverable amount.

What information must be reported on impairment of long-lived assets?

Information such as the carrying amount of the asset, the recoverable amount, the impairment loss, and the calculation of the impairment loss must be reported on impairment of long-lived assets.