Ida’s Impairment

1) (1) The U. S. GAAP section 360-10-35-21 states A long-lived summation (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying pith may not be recoverable. An example of an event wish this is a significant decrease in the market price of a long-lived asset. As stated in the case, one of Idas competitors interchange its extremely comparable commercialized edifice for an amount significantly little(prenominal) than its asking price.Since these assets argon very similar in comparison, this significantly less price for the competitors building is an example of a decrease in the market price of Idas commercial building. Therefore below the U. S. GAAP, Ida needs to test the U. S. commercial building for recoverability. (2) Under IAS 36. 12, there are certain external factors that lead you to want to test for recovery much(prenominal) as a decline in market nurture. The sale of the building across the street is an example of one of those external factors.IAS 36. 6 explains hurt and how to record impairment. Under IFRSs IAS 36. 66, the recoverable amount of cash-generating units (CGUs) should be determined for the person asset. Therefore, a recoverability test must be done. 2) As of U. S. GAAP 360-10-35-17, when insurance coverage to its U. S. based lender as of December 31, 2010, Ida should record $600 for impairment on the U. S. commercial building. Under GAAP, one must compare the fair value to the carrying amount.Since the fair market value is $3,900 and the carrying amount is $4,500, impairment is calculated as the difference $600. *All dollars in thousands (U. S. GAAP 360-10-35-17) 3) Under IAS 36. 6, when reporting to its nurture as of December 31, 2010, Ida should record $500 for impairment on the U. S. commercial building. The recoverable amount for the commercial building is $4,000. The carrying amount is $4,500. Since the carrying amount is great than the recoverable, the impai rment is the difference. *All dollars in thousands (IAS 36. 6)