A Company Would Need to Record an Impairment Loss for Its

question 90

Multiple Choice

A company would need to record an impairment loss for its equipment when:

• A) the original cost of the equipment exceeds its fair value and is deemed not recoverable.
• B) management determines that the equipment will no longer be used.
• C) the carrying amount of the equipment exceeds its fair value and is deemed not recoverable.
• D) the cash flows from the equipment are less than its fair value.

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Definitions:

Substantial Perform

This refers to a situation in contract law where a party has completed enough of their contractual obligations that they are considered to have fulfilled the contract, despite minor issues or incomplete details.

Right to Cure

The legal opportunity given to a defaulting party to correct or remedy their failure or breach within a specified time frame before further legal action is taken.

UCC

The Uniform Commercial Code encompasses a wide-ranging body of legal principles that control commercial transactions across the United States.

Installment Contract

An agreement where payment is made in parts over a period, typically for real estate or high-value items, until the total price is paid in full.