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    Impairment of fixed assets: Which statement is true under US GAAP?

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    Which of the following statements concerning the impairment of fixed assets is true under U.S. GAAP?

    1. Impairment losses are shown on the income statement net of tax.

    2. The test for recoverability compares the present value of all expected future cash flows produced by the fixed asset to its carrying value.

    3. To determine the amount of any impairment loss, fair value must be used.

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    Solution Preview

    1. False - the impairment loss is shown as a component of income from continuing ...

    Solution Summary

    The solution looks at impairment of fixed assets.