ZuoTi.Pro
Question

Asymmetric U.S. GAAP: Under U.S. GAAP, long-lived assets, such as real estate are reported on the...

Asymmetric U.S. GAAP:
Under U.S. GAAP, long-lived assets, such as real estate are reported on the balance sheet at the original purchase price of the asset. In the event that the value of a real estate becomes “impaired”—that is, the current market value of the real estate falls below its original purchase price and is unlikely to recover the lost value in the foreseeable future—the asset’s book value is written down to the lower current value and a loss is recorded on the firm’s income statement. Under no circumstances, however, can a firm write up the value of its real estate assets in the vent that current market value exceeds original purchase price. Discuss whether U.S. GAAP should be changed to allow a symmetric treatment of asset value increases and decreases. What are the implications of this asymmetry in the accounting treatment of assets (such as real estate) for U.S. financial statement users?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

losses if any. Answer: Summarized the information provided in the question; As per US GAAP: All fixed assets should be valuedas impairment (decrease) in the value of fixed asset should be debited impairment loss in income statement as per cost model

0 0
Add a comment
Know the answer?
Add Answer to:
Asymmetric U.S. GAAP: Under U.S. GAAP, long-lived assets, such as real estate are reported on the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Under U.S. GAAP, which of the following is not an acceptable way to report plant assets? a with detailed informati...

    Under U.S. GAAP, which of the following is not an acceptable way to report plant assets? a with detailed information on the face of the balance sheet b as a single amount, with a note to the financial statements that provides detailed information c at fair market value d at book value

  • Under the United States Generally Accepted Accounting Standards (U.S. GAAP), property, plant and Equipment are reported...

    Under the United States Generally Accepted Accounting Standards (U.S. GAAP), property, plant and Equipment are reported at historical cost net of accumulated depreciation. These assets are written down to fair value when it is determined that they have been impaired.Several other countries, including Australia, Brazil, England, Mexico and Singapore, permit the revaluation of property, plant and equipment to their current cost as of the balance sheet date. The primary argument in favor of revaluation is that the historical cost of...

  • Answer Team 1 ROOM FOl DEBATE . Debate 9-2 Donated Assets Under current U.S. GAAP, assets...

    Answer Team 1 ROOM FOl DEBATE . Debate 9-2 Donated Assets Under current U.S. GAAP, assets that have been donated to a company are recorded at fair value. Team Debate: Team Argue that donated assets should not be reported in a company's balance sheet. Base your arguments on the conceptual framework. You might find the historical cost principle useful in your discussion.

  • Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S....

    Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both, or neither. A company takes out a loan to finance the construction of a building that will be used by the company. The interest on the loan is capitalized as part of the cost of the building. Inventory is reported on the balance sheet using the last-in, first-out (LIFO) cost flow assumption. ,The gain on a sale and leaseback transaction classified as...

  • Required: 1. What are the classifications of long-lived assets? Explain their differences. 2. Record the purchase...

    Required: 1. What are the classifications of long-lived assets? Explain their differences. 2. Record the purchase on January 2 and the subsequent payment on January 12. Show computations. 3. Indicate the accounts, amounts, and effects (+ for increase and for decrease) of the purchase and subsequent cash payment on the accounting equation. Use the following structure: Date Assets Liabilities + Stockholders' Equity 4. Explain the basis you used for any questionable items. Explaining the Nature of a Long-Lived Asset and...

  • Which of the following would not be considered an intangible asset? goodwill patent copyright inventory Which...

    Which of the following would not be considered an intangible asset? goodwill patent copyright inventory Which of the following statements about capitalizing costs is correct? Capitalizing costs refers to the process of converting assets to expenses. Only the purchase price of the asset is capitalized. Capitalizing a cost means to record it as an asset. Capitalizing costs results in an immediate decrease in net income. If a company capitalizes costs that should be expensed, how is its income statement for...

  • 1.A balance sheet prepared in accordance with U.S. GAAP typically: Multiple Choice reports common stock at...

    1.A balance sheet prepared in accordance with U.S. GAAP typically: Multiple Choice reports common stock at the current market price of the stock. provides critical information for understanding a firm’s capital structure. helps to determine the proper mix of debt and equity financing. provides critical information for understanding a firm’s profitability. 2.In a common-size balance sheet, each balance sheet account is expressed as a percentage of total: Multiple Choice liabilities. assets. shareholders’ equity. assets plus shareholders’ equity. 3.Accrued liabilities represent:...

  • What date was the 2017 annual report filed? December 31, 2016 January 31, 2018 February 22,...

    What date was the 2017 annual report filed? December 31, 2016 January 31, 2018 February 22, 2018 December 31, 2017 Who is Columbia Sportswear Company’s auditor? KPMG Deloitte & Touche PricewaterhouseCoopers Ernst & Young Did Columbia Sportswear Company receive an “unqualified” opinion? No Yes Assets classified as Property, Plant and Equipment can be either acquired for use in operations, or acquired for resale. True False What is the December 31, 2017 balance (in thousands) of Land and Improvements for Columbia...

  • Please summarize this article in a summary. For Pensions, Valuing Real Estate Is Tough. Covid-19 Brings...

    Please summarize this article in a summary. For Pensions, Valuing Real Estate Is Tough. Covid-19 Brings New Hurdles With Covid-19 and the dramatic slowdown in deal making, investors are finding it more difficult to calculate the value of real-estate holdings Public pension funds invested in malls, apartments and offices over the last decade in search of higher returns. Now they are grappling with how much those real-estate investments are worth in a world transformed by Covid-19. Pension giant California Public...

  • 1) The traditional accounting model delays the recognition of value changes of assets and liabilities until...

    1) The traditional accounting model delays the recognition of value changes of assets and liabilities until what event occurs? a. A change in value. b. A market transaction. c. A balance sheet date. d. Cash is received or cash is paid. 2)Which of the following is not one of methods used by GAAP for treating value changes? a. Recognize value changes on the balance sheet and income statement when they are realized in a market transaction b. Recognize value changes...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT