Access the FASB Codification at https://asc.fasb.org/home to prepare responses to the following exercises. Provide Codification references for your responses.
Question 1.
(a) What is the definition of amortization?
(b) What is the definition of impairment?
(c) What is the definition of recoverable amount?
(d) What are activities, as they relate to the construction of an asset?
Question 2. Your client, Barriques Inc., is contemplating a restructuring of its operations, including the possibility of spinning off some of its assets to the original owners. However, management is unsure of the accounting for any impairment on the assets. What does the authoritative literature say about these types of impairments?
Question 3. Your great uncle, who is a CPA, is impressed that you are majoring in accounting, but based on his experience, he believes that depreciation is something that companies do based on past practice, not on the basis of any authoritative guidance. Provide the authoritative literature to support the practice of fixed-asset depreciation.