Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?
A) $5,000
B) $3,000
C) $1,000
D) $0

Question

Quizplus · Accepted Answer

Under U.S. GAAP, an impairment loss on a fixed asset is recognized only if the carrying amount of the asset is not recoverable and exceeds the fair value. The recoverability test is based on whether the carrying amount of the asset can be recovered through its undiscounted expected future cash flows. In this case, since the undiscounted expected future cash flows ($55,000) are greater than the carrying value ($50,000), no impairment loss is recognized.

Under US GAAP, If the Carrying Value of a Fixed Asset