💰 CPA Exam Prep

Impairment of long-lived assets under GAAP requires:

A Annual testing for all assets
B Testing when events indicate carrying amount may not be recoverable; write down to fair value
C No testing ever
D Automatic 10% writedown annually

✓ Correct Answer: Option B

GAAP impairment: triggered by events/indicators. If carrying amount > undiscounted future cash flows, write down to fair value.

Related CPA Exam Prep Questions