Rice Industries owns a manufacturing plant in a foreign country. Political unrest in the country indicates that Rice should investigate for possible impairment. Below is information related to the plant's assets ($ in millions): The amount of impairment loss that Rice should recognize according to U.S. GAAP and IFRS, respectively, is:

Question

Rice Industries owns a manufacturing plant in a foreign country. Political unrest in the country indicates that Rice should investigate for possible impairment. Below is information related to the plant's assets ($ in millions):  The amount of impairment loss that Rice should recognize according to U.S. GAAP and IFRS, respectively, is:

Quizplus · Accepted Answer

Under U.S. GAAP there is no impairment because the sum of future estimated cash flows exceeds book value. Under IFRS, the impairment loss is the difference between book value of $190 million and the recoverable amount of $180 million (the higher of the present value of future cash flows and fair value less costs to sell).

Rice Industries Owns a Manufacturing Plant in a Foreign Country