Management must review long-term assets for impairment when events or changes in circumstances indicate that book value might not be recoverable.

Question

Quizplus · Accepted Answer

Management is required to conduct impairment testing whenever an event or change in circumstances indicates that the carrying value of a long-term asset may not be recoverable. This is in accordance with generally accepted accounting principles (GAAP) which require companies to recognize and disclose impaired assets in their financial statements.

Management Must Review Long-Term Assets for Impairment When Events or Changes