We have some questions relating to the specifics on how an impairment test is conducted:
- We have a new situation where we have an asset that we will not hold for its useful life but will be selling it after a couple of years of use. In estimating future cash flows from the asset should we include its estimated disposal value in the cash flows?
- As you know, in the oil patch we are required to restore a property after production is complete and the wells are abandoned. Sometimes these costs are very significant and we recognize them as part of the cost of the production property and record a related liability. Should this restoration obligation be included in our estimates of undiscounted and discounted future cash flows as an outflow?