If a Long-Term Plant Asset Is Impaired,generally Accepted Accounting Principles

question 71

True/False

If a long-term plant asset is impaired,generally accepted accounting principles require the owner to adjust the carrying value downward from its book value to its fair value.

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Definitions:

Financing Policy

The strategies and guidelines that a company adopts to manage its financial affairs, including decisions on debt, equity, and capital structure.

Maturity Matching

Matching the maturities of debt used to finance assets with the lives of the assets themselves. The debt would be amortized such that the outstanding amount declined as the asset lost value due to depreciation.

Ex Post

An analysis or consideration of events after they have happened, focusing on actual results rather than forecasts.

Asset Lives

The estimated useful life of an asset, determining over what period the asset's cost will be depreciated or amortized.