Cloud Company determines that the future undiscounted cash flow generated from the use of its fleet of small aircraft are less than carrying values.For impairment purposes,an auditor would wish to further obtain evidence regarding which of the following?
A)parts inventory for the aircraft.
B)an economic outlook for the company's stock.
C)an independent valuation of the aircraft.
D)the historical cost of the aircraft.

Question

Quizplus · Accepted Answer

An independent valuation of the aircraft is necessary as it would provide evidence of the fair value of the aircraft, which is needed for impairment testing. Parts inventory, economic outlook, and historical cost are not directly relevant to impairment testing.

Cloud Company Determines That the Future Undiscounted Cash Flow Generated