US CMA Exam Part 1
If CV is greater than cash value of future cash flows - impairment exists
Asset must be written down to its FV
Impairment Loss Dr
To Accumulated Depreciation
(Increase in FV is not recognized under US GAAP)
Both Asset a/c and Accumulated Depreciation a/c - reduced
If sale proceeds are greater than CV, then profit on disposal
If sale proceeds are smaller than CV than loss on disposal
Under US GAAP, fixed assets are not reported at fair value since there could be fluctuation

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