U.S. GAAP Codification Accounting Standards, ASC

Financial Accounting Review

Principles of AccountingAccounting by Topic Accounting Terms Dictionary

Section 3240: Impairment of Long-lived Assets

[U.S. GAAP Codification Topic]

[U.S. GAAP before the Codification]
SFAS 15, June 1977, Accounting by Debtors and Creditors for Troubled Debt Restructurings
SFAS 114, May 1993, Accounting for Creditors for Impairment of a Loan, an amendment of FASB Statements No. 5 and 15
SFAS 144, August 2001, Accounting for the Impairment or Disposal of Long-Lived Assets

1. Initial measurement of property, plant and equipment
(1) Measured at cost
(2) Cost includes (2a)
(2a) all costs necessary to make the asset ready for intended use
(3) During the construction period
--> certain interest costs are also capitalized

2. Subsequent measurement of property, plant and equipment
(1) Depreciation
(2) Impairment of long-lived assets
(3) Disposal of long-lived assets

3. Classification of long-lived assets
(1) Long-lived assets held for sale
(2) Long-lived assets to be held and used

4. Long-lived assets "held for sale"
(1) Presented separately in the statement of financial position
(2) An asset is not depreciated while classified as "held for sale"
(3) Measured at the lower of (B) and (C)
(B) carrying amount
(C) fair value less cost to sell
(4) Newly acquired long-lived assets held for sale
--> measured at fair value less cost to sell, at the acquisition date
(5) If (C) < (B)
--> a loss is recognized
(6) If (B) > (C)
--> a gain is recognized up to "the cumulative loss" previously recognized
(7) A gain or loss
--> adjusts the carrying amount of the asset

5. Discontinued operations
The results of operations of (5a) and (5b) are
--> reported separately as discontinued operations
(5a) component that has been disposed of
(5b) component that is classified as "held for sale"

6. Long-lived assets to be 'held and used" are
--> tested for impairment

7. Impairment test
(1) Step 1: Test for recoverability
--> when there is an indication that carrying amount may not be recoverable
(2) Step 2: Measurement of impairment loss
--> if Step 1 shows that carrying amount is not recoverable

8. Recoverability test
Carrying amount is not recoverable
--> if (D) < (B)
(B) carrying amount
(D) sum of "undiscounted" cash flows from the asset

9. Impairment loss
(1) An asset is impaired when (E) < (B)
(2) Impairment loss = (B) - (E)
(B) carrying amount
(E) fair value

10. Impairment loss is not reversed
(1) If an impairment loss is recognized
--> adjusted carrying amount becomes "new cost basis"

(2) Impairment loss is "not" reversed
--> when there is a subsequent increase in fair value

Index of U.S. GAAP Financial Accounting Review

U.S. GAAP by Codification Topics 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales

 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

Copyright © AccountingInfo.comTM  Legal Disclaimer