During the third quarter, $22 million of long-lived asset
impairment was recognized on certain assets in Mexico as a result of the strategic evaluation.
First, the FASB recognizes that a PV technique is a common method of measuring fair value for long-lived assets
. Next, the Board recognizes the uncertainty involved in measuring fair value as indicated by terms such as "expected present value," "estimated future cash flows," and "uncertain." When a PV technique is used to measure fair value, the following could contribute to the unreliability of these fair value estimates:
Paragraph 29 and its related footnote 17 and the beading preceding that paragraph: Long-Lived Asset
to Be Exchanged [begin strikethrough]for a Similar Productive Long Lived Asset[end strikethrough] or to Be Distributed to Owners in a Spinoff For purposes of this Statement, a long-lived asset
to be disposed of in an exchange measured based on the recorded amount of the nonmonetary asset relinquished [begin strikethrough]exchange for a similar productive long lived asset[end strikethrough] or to be distributed to owners in a spinoff is disposed of when it is exchange or distributed.
Indeed, even without the slightest color of authority that the proposed procedure would provide, revenue agents have reportedly proposed [sections] 481(a) adjustments for repairs on long-lived assets
in tax years closed by the statute of limitations.
are normally recorded at historical cost.
When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset
. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset.
Exhibit 1: Guide to Recognizing Long-Lived Asset
For the full fiscal 2005 year operating income was hit by a net of $255.2 million in special items: $115.3 million in Midwest exit costs, $188.6 million in restructuring costs, $17.7 million in long-lived asset
impairment, $33 million in costs related to early debt extinguishment, $19 million associated with Hurricane Katrina, the aforementioned $9.7 million workers' compensation charge and $15.4 million for Canadian dollar hedging.
This article looks at five decisions that companies make throughout the life of a long-lived asset
, identifies potential problems in applying SFAS No.
SFAS 143 applies only to enforceable retirement obligations that result from the acquisition, construction, development, or normal operation of a long-lived asset
. Examples include a contractual obligation to tear down a manufacturing facility upon retirement or a legal obligation to decontaminate a nuclear power plant at the end of its operating life.
* IMPAIRMENT EXISTS WHEN THE CARRYING AMOUNT of a long-lived asset
or asset group exceeds its fair value and is nonrecoverable.