If an asset is determined to be impaired,it should be:
A)Depreciated only using the straight-line method.
B)Written up to its historical cost.
C)Reclassified as a liability.
D)Written down to its fair market value.

Question

Quizplus · Accepted Answer

If an asset is determined to be impaired, it should be written down to its fair market value. This means that the asset's carrying amount should be adjusted to reflect its new lower value. Writing the asset up to historical cost or classifying it as a liability would not accurately reflect its impaired value. Depreciating it only using the straight-line method may not reflect the asset's true value and would not address the impairment.

If an Asset Is Determined to Be Impaired,it Should Be