When an asset has a significant decline in value and is written down this is called?Depreciation is thus the decrease in the value of assets and the method used to reallocate, or "write down" the cost of a tangible asset (such as equipment) over its useful life span. Businesses depreciate long-term assets for both accounting and tax purposes.
What are the two steps in the two step process of measuring impairments?At this point, you know that you have a business asset – or asset group – that may not be recoverable due to any number of factors and circumstances. Now, to gauge whether you need to record any actual amount of impairment, you perform two different tests – (Step 1) recoverability and (Step 2) measurement.
Which of the following does not differ among the different depreciation methods?Which of the following does not differ among the different depreciation methods? Total depreciation recognized over the asset's service life.
What are the factors considered in determining the useful life of an asset?The useful life of identical assets varies by user, and that life depends on the asset's age, frequency of use, condition of the business environment, and repair policy. Additional factors that affect an asset's useful life include anticipated technological improvements, changes in laws, and economic changes.
|