USGAAP and IFRS Distinguish Three Categories of Long-Lived Assets for Purposes

question 75

Multiple Choice

U.S.GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses.The first category addresses long-lived assets except intangible assets not subject to amortization and goodwill. This category does not include:

• A)property, plant, and equipment.
• B)patents.
• C)franchise rights.
• D)land.
• E)brand names and trademarks.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales over a certain time period, such as rent, insurance, and salaries.

Break Even

A situation where the overall expenses match the overall income, causing zero net profit or loss.

Target Profit

The predetermined amount a business aims to earn over a specific period, used for planning and performance evaluation.

Selling Price

The cost at which customers can purchase a product or service.