investmentsinnoncurrentoperatingassets—utilizationandretirement(编辑修改稿)

investmentsinnoncurrentoperatingassets—utilizationandretirement(编辑修改稿)内容摘要：

the beginning of 2020: Number of tons withdrawn in 2020 100,000 Estimated recoverable tons as of the end of 2020 950,000 Total recoverable tons as of the beginning of 2020 1,050,000 Change in Estimated Units of Production Depletion charge per ton for 2020: $4,830,000/1,050,000 = $ (continues) Depletion charge for 2020: 100,000  $ = $460,000 1138 Change in Estimated Units of Production Cost assignable to recoverable tons as of the beginning of 2020: Original costs applicable to depletable resources $5,250,000 Add: Additional costs incurred in 2020 525,000 $5,775,000 Deduct: Depletion charge for 2020 420,000 Balance of cost subject to depletion $5,355,000 Estimated recoverable tons as of the beginning of 2020 1,050,000 Depletion charge per ton for 2020: $5,355,000/1,050,000 = $ Depletion for 2020: 100,000 $ = $510,000 1139 Accounting for Asset Impairment FASB Statement No. 144 addresses four questions: 1. When should an asset be reviewed for possible impairment?  An impairment review should be conducted whenever there has been a material change in the way an asset is used or in the business environment. (continued) 1140 2. When is an asset impaired?  An asset is impaired when the undiscounted sum of estimated future cash flows from an asset is less than the book value of the asset. Accounting for Asset Impairment (continues) 1141 3. How should an impairment loss be measured?  The impairment loss is the difference between the book value of the asset and the asset’s fair value.  The fair value can be approximated using the present value of estimated future cash flows from the asset. Accounting for Asset Impairment (continues) 1142 4. What information should be disclosed about an impairment?  Disclosure should include a description of the impaired asset, reasons for the impairment, a description of the measurement assumptions, and the business segment or segments affected. Accounting for Asset Impairment 1143 • Guangzhou Company purchased a building five years ago for $600,000. It has an expected life of 20 years (zero residual value) and has a book value of $450,000 (using straightline depreciation). • Guangzhou estimates that the building has a remaining useful life of 15 years. Net cash inflow from the building is expected to be $25,000 per year, and the fair value of the building is $230,000. (continues) Accounting for Asset Impairment 1144 • The $450,000 book value is pared to the $375,000 ($25,000  15 years) undiscounted future cash flows. An impairment loss should be recognized. The loss is $220,000 ($450,000 – $230,000). The impairment loss would be recorded as follows: Accumulated Depreciation—Building 150,000 Loss on Impairment of Building 220,000 Building ($600,000  $230,000) 370,000 Accounting for Asset Impairment 1145 Using the Guangzhou Company example, assume that after five years the fair market value is $540,000. Guangzhou elects to employ IAS 16. A journal entry is needed to recognize the asset revaluation. Accumulated Depreciation—Building 150,000 Revaluation Equity Reserve 90,000 Building ($600,000  $540,000) 60,000 International Accounting for Asset Impairment: IAS 16 1146 Immediately after revaluing the building to $540,000, Guangzhou Company sells it for $540,000 in cash. The disposal would be recorded as follows: Recording the Disposal of Revalued Asset Cash 540,000 Building 540,000 Revaluation Equity Reserve 90,000 Retained Earnings 90,000 Note that because Guangzhou chose to revalue the asset, the ―gain‖ is never reported as a gain. 1147 • Intangible assets are to be amortized by the straightline method unless there is strong justification for using another method. • Because panies must disclose both the original cost and the accumulated amortization for an amortizable intangible, the credit should be to a separate accumulated amortization account. Amortization and Impairment of Intangible Assets 1148 Ethereal Company purchased a customer list for $30,000 on January 1, 2020. It is expected to have economic value for four years. The expected residual value is zero. On December 31, 2020, the following journal entry is made to recognize amortization expense: Amortization Expense 7,500 Accumulated Amortization— Customer List 7,500 (continues) Amortization and Impairment of Intangible Assets 1149 On December 31, 2020, before the amortization entry is made, a test for impairment is made. The future cash flow of the list is expected to be $15,000—which is less than the book value of $22,500 ($30,000 – $7,500). The amount of the impairment loss is $10,500 ($22,500 – $12,000). Impairment Loss 10,500 Accumulated Amortization— Customer List 7,500 Customer List 1。