2.3 Other Long-Lived Assets — Impairment Testing

Under ASC 360, an entity must test long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Impairment losses should be recognized if the carrying amount of a long-lived asset (or its related asset group) (1) is not recoverable on the basis of projections of future undiscounted cash flows and (2) exceeds its fair value. Typically, long-lived assets assigned to a carve-out entity that were determined to be recoverable at the parent-entity level remain recoverable when considered at the carve-out level since, under ASC 360, long-lived assets are tested at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.1