What does impairment mean on the CPA exam?
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Impairment. Writing an asset down because its carrying amount can no longer be recovered. For most long-lived assets the write-down cannot later be reversed.
Defined against ASC 360-10-35-17.
Which CPA exam sections use impairment?
Impairment appears in 2 CPA exam sections: BAR, FAR.
Other terms defined against ASC 360-10
- carrying amount: What an asset or liability is currently shown at on the balance sheet: its original amount adjusted for depreciation, amortization, impairment or accrual.
- held for sale: A classification for a component the entity is actively marketing and expects to sell within a year.
Related terms
- reporting unit: An operating segment or one level below it, and the level at which goodwill is tested for impairment.
- capital assets: In GOVERNMENTAL reporting, long-lived assets such as land, buildings and infrastructure.
- temporary difference: A difference between the tax basis of an asset or liability and its reported amount that will produce taxable or deductible amounts in future years.
- asset retirement obligation: A legal obligation associated with the retirement of a tangible long-lived asset, recognized at fair value in the period incurred, with an equal asset retirement cost capitalized into the asset.
- equity method: Used when the investor can exercise significant influence, presumed at 20% or more of the voting stock.
- reacquisition price: What it costs to retire debt early, including any call premium.