Which of the following is not true?
A)Under U.S.GAAP, firms must test property, plant, and equipment for possible asset impairment when conditions indicate that a significant decrease in fair value has occurred.
B)Under U.S.GAAP, firms initially compare the undiscounted cash flows expected from the asset to the asset's carrying value.
C)Under U.S.GAAP, a fixed asset impairment occurs when the asset's carrying value exceeds the undiscounted cash flows.
D)Under U.S.GAAP, the amount of the recognized impairment loss is the excess of the carrying value over the fair value of the asset.
E)Under U.S.GAAP, firms recognize an impairment loss when the carrying value of a fixed asset exceeds its recoverable amount, the higher of (1) the fair value less cost to sell, and (2) value in use.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, the concept of "recoverable amount" as the higher of fair value less costs to sell or value in use is not used. This is a concept under IFRS. Under U.S. GAAP, impairment is considered when the carrying amount is not recoverable and exceeds fair value.

Which of the Following Is Not True