Determining the asset impairment, Accounting Basics

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Determining the asset impairment

Determining Asset Impairment

Response to the following problem:

The company purchased a building 14 years ago for $720,000. The building has accumulated depreciation of $504,000 and a fair market value of $150,000. The company expects the building will generate a net cash inflow of $30,000 per year for the next six years.

Determine whether, from an accounting point of view, the building is impaired.

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Accounting Basics: Determining the asset impairment

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