Rare Spider Case

ASC 360-10 provides guidance on accounting for property, plant, and equipment, and the related accumulated depreciation on those assets. This Subtopic also includes guidance on the impairment or disposal of long-lived assets. ASC 360-10 notes that long-lived tangible assets include land and land improvements, buildings, machinery and equipment, and furniture and fixtures.

“A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.”

Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.For the purposes of impairment testing, goodwill is allocated to each of the Group 's cash-generating units (CGUs), or groups of CGUs, expected to benefit from the synergies of the business combination. CGUs (or groups of CGUs) to which goodwill has been allocated are tested for impairment annually, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.If the recoverable amount of the CGU (or groups of CGUs) is less than the carrying amount of the CGU (or groups of CGUs), the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU (or groups

Physical depreciation is the loss in market value due to wear and tear and the actions of the forces of nature. It has two classes: curable physical deterioration – occurs when repairs add a value equal or in excess of the cost of the repair. This can be measured using the cost to cure. The following can be mentioned as a short lived curable physical deterioration: broken window, leaky plumbing, cracked paint or plaster, worn out floor cover, leaking roof. Incurable physical deterioration - is a situation where the cost of repair exceeds the added value to the property as of the date of the appraisal. In this case, it is not economically rational to repair or replace. The depreciated amount is determined using age-life ratio out of the total cost new of the item replaced. The following constitute examples of incurable physical deterioration roof cover, hot water heater, and carpeting.

* Test for recoverability — If indicators are present, perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset (group) in question to their carrying amounts (as a reminder, entities cannot record an impairment for a held and used asset unless the asset first fails this recoverability test).

We will discuss whether the Company’s approach for testing goodwill for impairment after recognizing an impairment charge related to a long-lived asset group classified as held-and-used is appropriate. This issue pertains to whether it is feasible to have a long-lived asset impairment without goodwill impairment.

“A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.”

Estimates of future cash flows used to test the recoverability of a long-lived asset group should be made for the remaining useful life of the asset group to the entity.

According to Section 360-10-35-21, examples of events that would cause an asset to be tested for impairment include a significant decrease in the market price of a long-lived asset, or a asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, or asset group, and a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group.

Under the Section 360-10-35-21 in FASB Codification, a long-lived asset shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Following are some examples of events that would cause an asset to be tested for impairment (FASB Codification 360):

Those living in a wildland urban interface area should consider the impacting risks associated with being there. "The wildland urban interface (WUI) has gained increasing importance as more Americans build homes in rural settings adjacent to public lands" (U.S. Fish & Wildlife Service, n.d., para. 1). With the amount of American population having interest in building their homes around these areas, leaving governing authorities a need to carefully review the impacting effect and risk

After calculating the fair value of Snowy Ridge’s assets it was necessary to test for impairment. Impairment was tested by comparing the carrying value of each asset to its fair value (see table 2). The carrying value of marketable securities as of June 30th was $4,500,000. The current fair value of marketable securities was found to be 4,565,000, a positive difference of$ 65,000. Changes in marketable securities are reported even without impairment, thus an adjustment was made (see table 3). The carrying value of the mountain division as of June 30th was $12,360,000. The current fair

The sidewalk was cracked and breaking. I watched as the bus went around the corner, and I was alone. I knew that I was being watched. The spider was always watching. Everywhere I went I knew that the spider was there. Sometimes I saw it, sometimes I didn’t. It was a big tarantula like thing with hairy legs, and big sharp pincers. I had no idea what it wanted, but I knew I didn’t want to find out. I had asked my mom once if she had ever seen the spider too, and her reply was, “It’s just your imagination, now go eat dinner.” That was the last I talked to anyone about it. I kept it to myself, pretending that it wasn’t there, but I knew it was. Watching me, wanting to get to me. The other spiders seemed scared of this one, they never seemed to be around when he was. Sometimes I would strain my eyes trying to see just one spider that wasn’t the tarantula, but I never could. I was doing just that today, looking into the cracks for any normal spider, when I saw it. The tarantula was sitting in one of the cracks, just waiting. If I would have taken one more step it could have touched my foot. If it did that I would have a heart attack. I went across the street to avoid going towards it, but there it was again sitting by a tree. I turned around to go the long way home when there it was again on someone’s fence. It was everywhere. I guess it was finally time to figure out what this thing wanted.

Analysing the recognition criteria for a liability in AASB Framework no. 83, we can reasonably conclude that there is a very high probability that future economic benefits will flow from the entity towards the restoration costs. As soon as the production begins, the restoration process will need to be undertaken at the end of the economic life of the asset. Also, the restoration liability can be reasonably estimated with reliability by analysing the historical and area specific measurements. Hence, since the restoration

PPE item that qualifies for recognition as an asset shall be measured at recognition of costs in the carrying amount of an item of PPE ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management. Therefore, costs incurred in using an item are not included in the carrying amount of that item its cost. The initial estimate of the costs of demolish, removing and restoring the site on which an entity has incurred. Measurement incurred by an entity after recognition shall choose either the cost model in paragraph 30 or the revaluation model in paragraph 31 as its accounting policy and shall apply that policy to an entire class of property, plant and equipment. Besides, depreciation is defined in MFRS116 as ‘the systematic allocation of the depreciable amount of an asset over its estimated life. Therefore, three factors should be taken into consideration for the depreciation charge which are depreciable amount estimated useful life and allocation method. Other than that, the carrying amount of an item of PPE shall be derecognized on disposal or when no future economic benefits are expected from its use or disposal.