Flynn Company Purchased a Building for $400,000

question 41

Multiple Choice

Flynn Company purchased a building for $400,000. The current book value of the building is $200,000 and the fair market value is $180,000. The sum of future cash flows from the building is $160,000. According to GAAP, the amount of impairment loss that should be recognized is

• A) $0
• B) $20,000
• C) $40,000
• D) $120,000

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Definitions:

Relative Approach

An approach that considers context and circumstances, understanding that perceptions and solutions may vary depending on specific situations.

Organization's Objectives

The specific, measurable goals or targets a business aims to achieve in a set period of time.

Market Control

A form of control obtained through competitive advantage, allowing entities to influence market conditions or prices.

Customer Feedback

Information provided by clients about their experiences with a product or service, used to improve business offerings.