The Assets of the Aerospace Inc On December 31st, 2013, the Fair Values of the Assets

question 90

Multiple Choice

The assets of the Aerospace Inc. (a separately incorporated entity fully owned subsidiary of ABC Transport Inc.) showed the following asset carrying values on December 31st, 2013 (in millions) : $\begin{array}{|l|l|}\hline \text { Cash } & \$ 100 \\\hline \text { Accounts Receivable } & \$ 20 \\\hline \text { Inventories } & \$ 10 \\\hline \text { Property. Plant \& Equipment (net) } & \$ 200 \\\hline \text { Patents (net) } & \$ 20 \\\hline \text { Goodwill } & \$ 75 \\\hline & \\\hline \text { Total } & \$ 425 \\\hline\end{array}$
On December 31st, 2013, the fair values of the assets listed above were as follows:
$\begin{array}{|l|l|}\hline \text { Cash } & \$ 100 \\\hline \text { Accounts Receivable } & \$ 15 \\\hline \text { Inventories } & \$ 25 \\\hline \text { Property. Plant \& Equipment (net) } & \$ 120 \\\hline \text { Patents (net) } & \$ 60 \\\hline & \\\hline \text { Total } & \$ 320 \\\hline\end{array}$
Both ABC and Aerospace Inc. adhere to IFRS.

-Has the aerospace division experienced impairment? If so, by how much?

• A) Yes, an impairment loss of $75 million has occurred.
• B) Yes, an impairment loss of $105 million has occurred.
• C) No, no impairment has taken place.
• D) Yes, an impairment loss of $95 million has occurred.

Comprehend the role and requirements of the Sarbanes-Oxley Act concerning internal controls and auditor's reports.

Understand the importance of comparing financial data across different periods and with other companies for comprehensive performance analysis.

Recognize the importance and limitations of earnings per share (EPS) as an indicator of company performance.

Grasp the significance of the auditor's report and the different types of audit opinions.

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