At the end of its 2018 fiscal year, a triggering event caused Janero Corporation to perform an impairment test for one of its manufacturing facilities. The following information is available: The manufacturing facility is:
A) Impaired because its book value exceeds undiscounted future cash flows.
B) Not impaired because its book value exceeds undiscounted future cash flows.
C) Not impaired because it continues to produce revenue.
D) Impaired because its book value exceeds fair value.

Question

At the end of its 2018 fiscal year, a triggering event caused Janero Corporation to perform an impairment test for one of its manufacturing facilities. The following information is available:  The manufacturing facility is:
A) Impaired because its book value exceeds undiscounted future cash flows. 
B) Not impaired because its book value exceeds undiscounted future cash flows. 
C) Not impaired because it continues to produce revenue. 
D) Impaired because its book value exceeds fair value.

Quizplus · Accepted Answer

As per the given information, a triggering event has occurred which requires a impairment test to be performed. The only option that mentions impairment is option A, which states that the manufacturing facility is impaired because its book value exceeds undiscounted future cash flows. Therefore, the best choice is A.

At the End of Its 2018 Fiscal Year, a Triggering