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Chapter 2 — Long-Lived Assets Classified as Held and Used

2.4 Testing Long-Lived Assets for Recoverability

2.4 Testing Long-Lived Assets for Recoverability

ASC 360-10
Long-Lived Assets Classified as Held and Used
35-16 This guidance addresses how long-lived assets or asset groups that are intended to be held and used in an entity’s business shall be reviewed for impairment.
35-17 An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability, whether in use (see paragraph 360-10-35-33) or under development (see paragraph 360-10-35-34). An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value.
05-6 This Subsection provides guidance that focuses on developing estimates of future cash flows used to test for recoverability, including the:
  1. Cash flow estimation approach
  2. Cash flow estimation period
  3. Types of asset-related expenditures that should be considered in developing estimates of future cash flows.