What Should a Company Do If an Asset's Carrying Value

question 85

Essay

What should a company do if an asset's carrying value exceeds its recoverable amount due to poor estimates? How can companies keep such instances to a minimum?

---

Definitions:

Expected Value

The anticipated value of a random variable, calculating the mean of all possible values weighted by their probabilities.

Soccer Team

A group of players formed to compete in soccer matches, typically consisting of eleven players.

Random Variable X

A variable whose possible values depend on the outcomes of a probabilistic phenomenon.

Expected Profit

The forecasted amount of profit, calculated as the sum of all possible profits each multiplied by their probabilities of occurrence.